401k Loan Calculator (2026) — See Payments & True Cost of Borrowing
Calculate your 401k loan payments and instantly see the true cost of borrowing — including lost market growth. Updated for 2026 IRS 401k loan rules.
What is a 401k Loan Calculator?
A 401k loan calculator is a financial modeling tool that computes your estimated monthly repayment schedule when borrowing from your retirement account. Crucially, it also calculates the opportunity cost—the amount of compounded growth your money would have earned had it remained invested in the market during the loan repayment period.
Estimated Payment
401(k) Loan Calculator Terms
Deciding to borrow from your retirement account is a major financial choice. While taking a 401(k) loan offers fast access to cash without a standard credit check, it can severely impact your long-term wealth. To use our premium 401k loan calculator effectively, it is critical to understand the following key terms:
Loan Amount (Principal)
This is the total amount of cash you are withdrawing from your vested 401(k) balance. Under IRS rules, the maximum you can borrow is usually 50% of your account balance, capped at $50,000.
Repayment Term
The number of years you have to pay the borrowed money back into your account. The standard maximum term for a general-purpose 401(k) loan is 5 years. If the loan is used to purchase a primary residence, the term can sometimes be extended.
Interest Rate Paid to Self
Unlike a bank loan where interest is paid to a lender, the interest on a 401(k) loan is paid back into your own retirement account. This rate is usually set by your plan administrator (often the Prime Rate plus 1% or 2%). While paying yourself sounds great, remember that these payments are made with after-tax dollars.
Lost Market Opportunity
This is the hidden cost of a 401(k) loan. When you remove funds from your 401(k), that money is no longer invested in the stock market. Because it halts your compound interest, you lose out on the potential market growth those funds would have earned during the repayment period.
Frequently Asked Questions About Borrowing from your 401k
Under IRS rules, the maximum you can borrow is 50% of your vested 401k balance, up to $50,000. If your vested balance is below $10,000, some plans may allow you to borrow up to the full balance amount.
You borrow from your vested 401k balance and repay it with interest back into your own account. The interest rate is typically the Prime Rate + 1–2%. Because repayments are made with after-tax dollars, you'll be effectively double-taxed on those funds — once now and again when you withdraw in retirement.
If you leave your employer — voluntarily or due to layoff — most plans require full repayment by the tax filing deadline of the following year. Any unpaid balance is treated as a taxable distribution and subject to the 10% early withdrawal penalty if you are under 59½. See IRS loan repayment rules.
No. A 401k loan does not require a credit check and does not appear on your credit report. Your credit score is completely unaffected. However, if you default (e.g., by leaving your job), the amount becomes a taxable distribution.
Yes. Most 401k plans allow early repayment with no prepayment penalty. Paying off the loan ahead of schedule reduces your lost market growth opportunity and restores compound interest sooner.
A 401k loan typically offers lower interest rates and no credit check vs. a personal loan. However, the hidden cost is significant lost investment growth — money removed from the market stops compounding. Use our calculator above to compare the full picture before deciding.