Table of contents

Basic Qualification Requirements

Before using the calculator, confirm you meet these basic requirements:

Calculate Your Solo 401k Loan Eligibility

Use this calculator to determine if you qualify for a Solo 401k loan and understand your borrowing limits. Enter your current account balance and desired loan amount to see your maximum available loan, required liquid cash, and estimated monthly payments. The calculator factors in IRS limits (50% of balance or $50,000 maximum) and helps you understand if you meet basic qualification requirements.

Current Solo 401k Balance Enter your total Solo 401k account balance
Amount of Liquid Cash Enter the amount of uninvested cash in your account
Desired Loan Amount Enter how much you'd like to borrow
Number of Existing Loans Enter the number of Solo 401k loans you currently have (maximum 3 allowed)
Loan Purpose This affects your maximum repayment term

Loan Qualification Results

Maximum Loan Amount Available The lesser of 50% of your vested balance or $50,000, as per IRS rules $0.00
Required Liquid Cash Amount of uninvested cash needed in your account to process the loan $0.00
Maximum Repayment Term 5 years for general purpose, 15 years for primary residence purchases 0 years
Estimated Interest Rate Based on the current Prime Rate plus 1-2%. Interest payments go back into your account. Prime + 1-2%
Qualification Status Overall eligibility based on IRS rules and available funds Not Qualified

Solo 401k Loan Rules & Guidelines

Loan Amount Limits

You can borrow up to 50% of your vested account balance or $50,000, whichever is less. The loan amount is limited by your available liquid cash in the account. Learn more about Solo 401k loan rules.

Qualification Requirements

  • Must have sufficient liquid cash in your account
  • No credit check required
  • Plan must allow for loans (not all plans do - Carry Solo 401k plans support loans)
  • Must be able to make regular payments
  • Maximum 3 outstanding loans allowed at any time

Repayment Terms

  • General purpose loans must be repaid within 5 years
  • Primary residence loans can be repaid within 15 years
  • Regular payments must be made at least quarterly
  • Payments must be made in equal amounts (level amortization)
  • Interest payments go back into your retirement account

Interest Rates

Interest rates are typically set at Prime Rate plus 1-2%. The exact rate depends on your plan provider and must be reasonable according to Department of Labor guidelines. All interest payments go back into your retirement account.

Tax Implications

  • Loan is not taxable if repaid according to terms
  • No early withdrawal penalties if terms are met
  • Defaulted loans may be treated as distributions
  • Distributions subject to 10% early withdrawal penalty (if under 59½)
  • Regular income taxes apply to defaulted loans

Important Considerations

  • Reduces retirement savings temporarily
  • Missed growth opportunity on borrowed funds
  • Must be repaid if leaving employment
  • Regular payment schedule required
  • Consider alternatives before borrowing
  • Consult with tax professional
  • State laws may affect loan terms
  • Plan documents must explicitly allow loans

Loan Security Requirements

  • Loan must be adequately secured
  • Typically secured by your remaining account balance
  • Must maintain sufficient liquid cash for loan processing
  • Some assets may need to be liquidated to provide cash for loan

Additional Requirements

Consider comparing a 401k hardship withdrawal vs loan before making your decision. You can also learn more about Solo 401k withdrawal rules.

The Solo 401k Handbook

Everything you need to know about the most powerful retirement plan for business owners and the self-employed.

Important Disclaimer

This calculator provides estimates only and should be used for educational and illustrative purposes only.

  • IRS rules and regulations regarding Solo 401k loans are complex and subject to change
  • Individual plan provisions may vary significantly
  • Not all Solo 401k plans permit loans - check with your plan provider
  • Interest rates and terms may vary by provider and market conditions
  • The calculator provides estimates only and actual loan terms may differ
  • Not all qualification factors can be accounted for by this calculator
  • This is not tax, legal, or financial advice
  • Consult with qualified tax, legal, and financial professionals before taking any Solo 401k loan
  • Additional requirements or restrictions may apply based on your specific plan
  • Carry.com and its affiliates are not responsible for any decisions made based on these calculations

By using this calculator (version 1.0.35H), you acknowledge that you understand these limitations and will seek professional advice for your specific situation.