401(k) loans hide their real cost
You're paying yourself interest, but you're also missing years of compound market growth. A $12k loan over 5 years at 8% market return costs ~$5,600 in foregone growth — on top of any fees.
401(k) Loan Payoff
True cost of a 401(k) loan including lost growth and early exit risk.
Results
Lost growth (opportunity cost)
$5,631.94
Monthly payment
$237.61
Total repaid
$14,256.86
Real cost
$7,888.80
Insight: The real cost is interest paid PLUS market gains you missed. A job change often triggers immediate repayment — with tax + 10% penalty if you can't.
Frequently asked questions
1.What if I leave my job?
Most plans require full repayment within 60–90 days. Unpaid balance becomes a taxable distribution plus 10% early-withdrawal penalty.
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