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Although your Savings Plan is intended for the future, you can borrow from your account for any reason. Generally, your Plan allows you to borrow up to 50% of your vested account balance. The minimum loan amount is $1,000 - the maximum loan is $50,000 minus the highest outstanding loan balance over the previous 12 months. You then pay the money back into your account, plus interest, through after-tax payroll deductions.

Note that, when you take a loan, the money you borrow comes out of your own account, so your balance is reduced by the amount of your loan. But taking a loan has another, less visible, effect on your account over the long term. While a loan may be a practical option when you need financial assistance, over time you could miss out on the full potential value of your principal. In other words, the money you take out of your account is no longer working for you, and therefore, loses the potential to grow. Even if you repay a loan to your account and continue to invest in the plan, you still lose earnings potential for the loan amount while you’re repaying it.

Be sure you understand the plan guidelines and impact of taking a loan before initiating a loan from your plan account.

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