• Daniel Blue

Can I Have More Than One Solo 401(k) Loan?



Here recently, I was talking to one of our clients about his Solo 401(k). And he was surprised to learn his Solo 401(k) could have more than one loan on the plan. Some of you watching this may already have a loan that you took from your Solo 401(k)and those dollars might've been used to pay off some high-interest rate credit card debt. Or maybe you used the money to fund a business. Remember, you can have more than one loan on your Solo 401(k) as long as the loans combined don't exceed more than 50% of the account value or more than $50,000.


You see, this client, a couple of years ago, he took out a loan of about $20,000. He used that money to pay off some credit card debt. And life just happens. Some things happened in his life where a few years later, he finds himself into some more high-interest rate credit card debt. I reminded him that he had enough money in his Solo 401(k)where the math just worked out.


He was able to take out another loan from his Solo 401(k)and pay off the credit card debt. And he was super happy to hear this because he was just going to take a distribution from his 401(k) and have to claim that money as income and pay penalties and taxes. Instead, he's taking advantage of his Solo 401(k). He's using another loan with the Solo 401(k) to pay off some high-interest rate credit card debt.


So a reminder, you can have more than one loan on your Solo 401(k) as long as the loans combined don't exceed more than 50% of the account value or more than $50,000, whichever number is less. If you have any questions, if you need any help with this loan, we're here for you. Give us a call at 1-844-401-5473

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