401K Loan Calculator: Borrow Smart from Your Retirement in 2025/2026
Need cash fast but don’t want to touch savings or credit cards? A 401K Loan Calculator shows exactly how much you can borrow from your 401(k), your monthly payments, total interest, and the hidden cost to your retirement growth. In 2025, with IRS limits at $50,000 or 50% of vested balance (whichever is less) and repayment within 5 years (or by tax filing if you leave your job), millions use 401(k) loans for emergencies, debt consolidation, or home repairs—without taxes or penalties if repaid on time. Gcalculate.com delivers instant results with opportunity cost, tax implications, and early withdrawal warnings.
What Is a 401K Loan Calculator?
A 401(k) loan allows you to borrow money from your retirement savings, typically up to 50% of your vested balance or $50,000, whichever is less. Unlike traditional loans, you repay the loan (plus interest) to your own 401(k) account, usually through payroll deductions. While this can seem appealing, there are risks, such as reduced retirement savings and potential tax penalties if you fail to repay.
A 401K Loan Calculator computes:
- Max loan amount (50% of vested balance, up to $50,000)
- Monthly payment (principal + interest, usually prime + 1–2%)
- Total repayment
- Lost investment growth (opportunity cost at 7% avg market return)
- Break-even analysis
It’s not a withdrawal—you’re borrowing from yourself, paying yourself back with interest (typically 5.5–8.5% in 2025).
How Does the 401K Loan Calculator Work?
Uses amortization formula and compound growth projection.
Core Formulas:
- Max Loan = MIN(50% × Vested Balance, $50,000) − $10,000 if prior loan
- Monthly Payment (PMT):
PMT = [P × r × (1 + r)^n] / [(1 + r)^n − 1]
- P = loan amount
- r = monthly interest rate
- n = number of months
- Opportunity Cost = Future value of payments if invested instead
401K Loan Rules in 2025 (IRS)
| Rule |
Detail |
| Max Amount |
Lesser of: |
- $50,000
- 50% of vested balance
- Minus highest prior loan balance in last 12 months | | Min Amount | Usually $1,000 | | Repayment Term | 5 years (60 months) — unless for primary residence (up to 15–30 years, plan-dependent) | | Interest Rate | Prime + 1–2% (2025 prime ≈ 5.5% → 6.5–7.5%) | | Repayment | Via payroll deduction | | Taxes/Penalties | None if repaid on time 10% penalty + income tax if defaulted (and under 59½) | | Job Change | Must repay in full by tax filing deadline (April 15, 2026 for 2025 loans) or it’s a taxable distribution |
401K Loan Calculator Examples
Example 1: $30,000 Loan, 5 Years
| Input |
Value |
| Vested Balance |
$100,000 |
| Loan Amount |
$30,000 |
| Interest Rate |
6.5% |
| Term |
60 months |
Results:
- Monthly Payment: $589.78
- Total Repaid: $35,386.80
- Interest Paid (to yourself): $5,386.80
- Opportunity Cost (7% growth): $6,800 lost in growth
- Net Cost: $1,413 (if market grows 7%)
Example 2: Max Loan from $80,000 Balance
- Max: 50% = $40,000
- Monthly (6.5%, 60 mo): $786.38
- Total Repaid: $47,182
- Opportunity Cost: $9,000+
Pros & Cons of 401K Loans (2025)
| Pros |
Cons |
| No credit check |
Opportunity cost (missed 7–10% growth) |
| Lower interest than personal loans |
Default = taxes + 10% penalty |
| Interest paid to yourself |
Must repay if you leave job |
| Fast approval (1–7 days) |
Reduces compound growth |
When to Use: Emergency, debt payoff, home down payment – When to Avoid: Vacations, cars, non-essentials
Opportunity Cost: The Hidden Price
If you don’t borrow, that $30,000 grows at 7% for 5 years → $42,114 You repay $35,387 → Net Loss: ~$6,727 in future value
Break-even: Only if market returns < interest rate (rare).
Alternatives to 401K Loans (2025)
| Option |
Rate |
Risk |
| Personal Loan |
7–12% |
Credit-based |
| HELOC |
6–9% |
Home at risk |
| 0% Intro Credit Card |
0% (12–21 mo) |
High after promo |
| Roth IRA Withdrawal |
Tax-free (contributions only) |
Reduces retirement |
Calculate Your 401K Loan Now
Use the 401K Loan Calculator on Gcalculate.com → Input $100,000 balance, $30,000 loan, 6.5%, 60 months → Get $589.78/mo, $6,800 lost growth, default tax warning. A 401K Loan Calculator is your 2025 safety net—borrowing $30,000 at $589.78/month with $5,387 interest back to you, but $6,800 lost growth at 7%. On Gcalculate.com, see max loan, repayment, opportunity cost, and default risks instantly. Use only for emergencies or high-interest debt—never lifestyle. Repay fast, plan for job changes, and keep your retirement on track.
FAQs
How Does a 401K Loan Calculator Work?
Enter vested balance, loan amount, rate, term → get monthly payment, total repaid, opportunity cost.
What’s the Max 401K Loan in 2025/2026?
$50,000 or 50% of vested balance — whichever is less.
Can I Pay Off Early?
Yes — no prepayment penalty. Interest saved goes back to your account.
What Happens If I Leave My Job?
Must repay by tax deadline (e.g., April 15, 2026) or it’s a taxable withdrawal.
Is Interest Paid to Myself?
Yes — goes back into your 401(k), but still misses market growth.
Can I Take Multiple 401K Loans?
Yes — but total outstanding ≤ $50,000 cap.
Should I Use 401K Loan for Debt?
Only high-interest debt (>10%). Otherwise, consolidate elsewhere.
