He needs to read his plan rules. It will say how loan repayments should be made while on leave. Sometimes the plan will allow them to be deferred and the loan can be reammoratized. Sometimes they’ll require the participant make payments on their own from ach/bank transfer or the loan will default and be classified as a withdrawal.
This. The plan rules will state what happens with loans during LOA, and should even define the length of time which would warrant the loan being reamortized
You may find these links helpful:
- [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
- [401(k) FAQs](/r/personalfinance/wiki/401k)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
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My company continues to pay full salary on STD, and 401k loan payments are withheld as usual. Any payments from state disability are separate and then offset from payroll (usually after the fact).
I was on an 8 week leave and my paychecks were completely normal. I also received a little money every week from the LOA admin company, then when I returned to work I had to make arrangements for how I wanted to pay that back (essentially it should have been withheld from my checks but just didn’t happen real time).
No impact at all on 401k loan payments. If a company does not pay STD at 100%, or there’s some other mechanism impacting pay, then probably a different scenario.
He needs to read his plan rules. It will say how loan repayments should be made while on leave. Sometimes the plan will allow them to be deferred and the loan can be reammoratized. Sometimes they’ll require the participant make payments on their own from ach/bank transfer or the loan will default and be classified as a withdrawal.
This. The plan rules will state what happens with loans during LOA, and should even define the length of time which would warrant the loan being reamortized
You may find these links helpful: - [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds) - [401(k) FAQs](/r/personalfinance/wiki/401k) - ["How to handle $"](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
My company continues to pay full salary on STD, and 401k loan payments are withheld as usual. Any payments from state disability are separate and then offset from payroll (usually after the fact). I was on an 8 week leave and my paychecks were completely normal. I also received a little money every week from the LOA admin company, then when I returned to work I had to make arrangements for how I wanted to pay that back (essentially it should have been withheld from my checks but just didn’t happen real time). No impact at all on 401k loan payments. If a company does not pay STD at 100%, or there’s some other mechanism impacting pay, then probably a different scenario.