Accelerate Solo 401k Participant Loan Payments

I am finally getting some if my other pensions rolled into my new Solo 401K this week. Next, I think I will indeed want to take out a loan from the solo 401K, and I have a question or two about that.

QUESTION 1: First, I understand the standard period for a loan is 5 years. Am I allowed to accelerate payments, or pay in full at any time?

ANSWER: Yes the solo 401k regulations allow for accelerated loan payments without a pre-payment loan penalty. If you decide to pay the solo 401k loan back in full and early, please let your solo 401k provider know and so that they perform a calculation for you.

QUESTION 2: Second, can more than one loan be taken at different times, so long as the $50K limit isn’t overstepped?

ANSWER: Yes and click on the IRS solo 401k loan regulations to learn about the multiple solo 401k loan rules. Essentially, the maximum loan limit may not be exceeded during a 12 month period. When you click on the above IRS link, you will see an example concerning the 12 month solo 401k loan rule.

Thanks alot, Christine in Indiana

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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