401k Loan Calculator

Most 401(k) plans let you borrow against your own balance — no credit check, no application, and the interest you're charged is paid right back into your own account. That last part makes it sound like borrowing from yourself is free. It isn't, for two separate reasons: the money you removed stops compounding at the market's rate while it's gone, even though you're paying yourself interest, and that interest is paid with after-tax paycheck dollars that land inside a pre-tax account — taxed once now, taxed again on withdrawal. On top of both, if you leave your job before the loan is repaid, the outstanding balance can come due almost immediately, taxed as a withdrawal plus a penalty. This lesson races your real account value against what it would be worth had you left it alone, so you can see exactly what borrowing from yourself costs — and the one narrow case where it doesn't.

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.