401k loan interest rate setting procedure

JanThal · September 2007

Given the volatility in the housing and mortgage market as well as general credit/debt crisis, we're reviewing our procedure for setting the interest rate charged on 401k plan loans-we're using prime+1% and change the beginning of each quarter. Regulations call for a "reasonable rate" which seems to leave the practice wide open. Please let me know if you've made any changes to your practice given the recent market influences....or if you have a practice different than as described, I'd appreciate your sharing. Thanks.

dhall111 · September 2007

We also use Prime +1% and have no plans to change it.

hrproky · September 2007

Prim + 1% seems to be the norm. I would stick with that.

401k loan interest rate setting procedure

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