Free 401(k) loan calculator from Fynvorax. Compare interest repaid to your account against missed market growth and total opportunity cost.
401(k) loan: you repay yourself with interest, but miss market growth on borrowed amount and face job-loss repayment risk. $50k loan for 5 years at 5% vs staying invested at 8% has real opportunity cost.
If you leave or lose your job, the IRS typically mandates that you must repay the outstanding loan balance in full by the tax filing deadline. If you cannot repay, the remaining sum is classified as an early withdrawal distribution, triggering ordinary income taxes plus a 10% penalty fee.
Many plans require full repayment within months or the balance becomes taxable distribution + penalty if under 59½.
No — you pay interest with after-tax dollars into a pre-tax account; not deductible like mortgage interest.
You repay with after-tax money; at withdrawal the interest portion may be taxed again as part of retirement distributions — often cited as hidden cost.