Can I Borrow From My 401(k) Plan?

If your plan allows loans, you may be eligible to borrow from your 401(k) account. Loan availability and terms are determined by your plan’s provisions, so it’s important to confirm the rules before applying.

Who Can Take a 401(k) Loan*

You may be eligible for a loan if:

• Your employer’s plan allows loans
• You are still actively employed by the company sponsoring the plan
• You have a vested account balance of at least $2,000

*Loans are subject to Plan Administrator approval

How to Check If Your Plan Allows Loans

1. Log in to your account 
2. Go to 401(k) > Documents + Forms
3. Open your Summary Plan Description (SPD)
4. Look for the section about loan availability 
5. You can also find loan provision information on the plan overview page by going to 401(k) > Overview

Loan Provisions (Terms and Limits)

Personal vs. Residential Loans

Your 401(k) plan may offer two types of loans:

• Personal Loan
  • Can be used for any purpose—no disclosure or documentation required
  • Must be repaid within 5 years
• Residential Loan
  • Can only be used to purchase a primary residence
  • May be repaid over a longer period, up to 30 years
• Requires documentation (e.g., purchase agreement or closing disclosure) provided to your employer before the loan is approved. This documentation is required for audit purposes.

How to Request a 401(k) Loan

1. Log in to your account 
2. Go to 401(k) > Loans
3. Click Apply Now
4. Select your loan type: Personal or Residential
5. Enter your desired loan amount
6. Choose how you’d like to calculate payments (by term or by payment amount)
7. Click Calculate to preview your loan terms
8. If satisfied, click Continue
9. Choose your delivery method (check or wire)
10. Download your Promissory Note and Amortization Schedule
11. Click I Approve to complete your application

When Will I Receive the Loan Funds?

• Checks may take up to 10 business days to arrive. They are mailed by your plan’s custodian, not Ubiquity.
• Wire transfers may arrive faster—typically within 5 business days, depending on your bank’s processing schedule.

To request a wire instead of a check:

1. Confirm your bank accepts incoming wires. Wires cannot be sent to prepaid debit cards.
2. Obtain your bank’s domestic wire routing number (not your personal check routing number)
3. Verify how your bank wants your account identified for incoming wires
4. Contact us at info@myubiquity.com for secure transmission instructions

How Is the Loan Repaid?

• Loan payments are made through after-tax payroll deductions.
• Your employer is responsible for withholding the repayment amount from your paycheck and sending the payment to the plan custodian.
• Ubiquity posts the loan payments to your 401(k) account.

Important Notes:

• You cannot send loan payments directly to Ubiquity
• All loan payments—including early payoffs and final payments after termination—must go through your employer, who will forward the funds to the custodian for processing.
• If you’re no longer employed and wish to payoff your loan before taking a distribution, contact your former employer to arrange for repayment.

Be sure to check your pay stubs and 401(k) account regularly to verify that loan payments are being withheld and posted correctly. If you notice a missed payment or issue, contact your plan administrator right away to avoid falling behind.

Where Does the Loan Interest Go?

The interest you pay is returned to your own 401(k) account—you're borrowing from yourself and paying yourself back with interest.

What Happens If I Leave My Job With an Outstanding Loan?

If your employment ends, the loan becomes immediately due. You have the following options:

1. Repay the loan in full:

• Write a check for the payoff amount to your former employer
• Your employer will forward the payment to the plan custodian
• Ubiquity will post the payoff to your account

1. Take a distribution:

• The outstanding loan balance will be included as taxable income on the Form 1099-R

1. Take no action:

• After ~90 days, the loan may be marked defaulted
• A Form 1099-R will report the loan balance as taxable income
• You may owe federal and state taxes plus a 10% early withdrawal penalty

Need Help?

If you need assistance accessing the loan application or have questions about loan eligibility, email us at info@myubiquity.com or chat with us 24/7 by clicking the chat icon after logging into your account.