Solo 401k Loan | Credit Report

QUESTION: Does a loan from a solo 401k show on credit report?

ANSWER: The solo 401k with a loan feature is not dependent on the solo 401k participant’s credit record. Further, the solo 401k participant is essentially borrowing from his or her own solo 401k plan not a bank or credit union, so a credit check is not performed at time of loan. However, if the solo 401k loan defaults, the outstanding loan balance will be reported as a distribution on Form 1099-R and income taxes will need to be paid on the amount distributed.

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 >>