What are the terms for repayment of a loan?
General purpose loans must be for a period of not less than 12 months nor more than five years. A loan for the purchase of a home must be for a period of not less than 12 months nor more than 15 years. A “Home Loan” is a loan used to purchase a dwelling unit which you will use as a principal residence within a reasonable time. 4. How are loans repaid? Loans are repaid by entering into an Automated Clearing House (ACH) debit agreement with your personal bank. You investment provider will assist you with setting this up. 5. What happens if a plan loan is not repaid according to its terms? The loan might be considered in default for non-payment, participant misrepresentation or a change in financial status such as bankruptcy. A default will be considered a “deemed distribution” which is a taxable event. Until the final disposition of the loan, you remain obligated for any unpaid principal and accrued interest. Consult the plan document or a tax advisor for specific information about your
General purpose loans must be for a period of not less than 12 months nor more than five years. A loan for the purchase of a home must be for a period of not less than 12 months nor more than 15 years. A “Home Loan” is a loan used to purchase a dwelling unit which you will use as a principal residence within a reasonable time. 4. How are loans repaid? Loans are repaid by entering into an Automated Clearing House (ACH) debit agreement with your personal bank. You investment provider will assist you with setting this up.
