Poll: 401k Loan Fees
njmhr1109
18 Posts
Hello,
Does your 401(k)administrator charge employees when they take a loan? If so, how much do they pay?
Our third party administrator raised the loan fee to $50 for the initial application fee and $50 each year until the loan is paid off. We think this is pretty steep and would like to compare it with other companies.
Thank you.
Does your 401(k)administrator charge employees when they take a loan? If so, how much do they pay?
Our third party administrator raised the loan fee to $50 for the initial application fee and $50 each year until the loan is paid off. We think this is pretty steep and would like to compare it with other companies.
Thank you.
Comments
Could you tell me who administers your plan, Merrill Lynch, Fidelity...?
Thanks for your help!
I think you will find that this is sort of the normal cost. (About $40-100 to set up and anywhere from $25-100 per year to service.)
I was greatly in favor of giving our employees the ability to have a loan. However, they grossly overuse it for any reason in the world. (I have to be very careful because it is their money.) If they want a loan, let them pay for it. Our interest rate is 2% over prime, adjusted each quarter.
E Wart
All 401(k) loans are reviewed and approved by the President. Employee pays prime interest % rate in effect when the loan originates....no adjusting for length of loan.
Our Safe Harbor 401K custodial account is with Merrill Lynch.
Frivolous loans used to rub me the wrong way, since the Company was good enough to provide a plan with the intent of aiding an employee's senior years - not to build up $2,000 in assets, then to take a $1,000 loan. But, in reality, it is their money. As a final thought,I know a number of employees who would like to move on with their careers, but cannot because they are paying off a sizeable 401K loan.
Bisys charges a one-time $125 fee deducted from the account.
Actually, I borrowed from my own 401k so I could plunk down a sizeable down payment on a house. As soon as I sold the old house, I immediately paid my loan back. I'm the only one in my company who has ever paid one off ahead of schedule!