So, You Want to
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| How To Borrow Money From Voya 401k |
Raid Your Retirement Piggy Bank
: Borrowing from Your Voya 401(k) (AKA the Last Resort Loan)Let's face it, adulthood is expensive. Sometimes, even with a fancy 401(k) like yours managed by the ever-reliable Voya, things come up. Maybe your car decided it wanted to impersonate a spaceship and needs a galactic amount of repairs, or perhaps your dream vacation to Tahiti suddenly requires a first-class upgrade (because who wants to be stuck in coach next to Uncle Steve and his questionable snack choices?). Whatever the reason, you're eyeing your 401(k) like a kid eyeing a giant cookie jar.
Hold on to your horses (and your future self's financial security)! Borrowing from your retirement savings should be a last resort. It's like taking candy from a future you, and let's be honest, future you might not be too thrilled about that.
But hey, we've all been there. So, if you've exhausted all other options (like that dusty piggy bank collection in the back of your closet), here's a crash course on borrowing from your Voya 401(k):
QuickTip: Stop and think when you learn something new.
Step 1: Check Your Eligibility (Because Not Everyone Gets to Play)
Not everyone gets to raid their retirement piggy bank. You'll need to check your plan documents or call Voya to see if your employer even allows loans. There are also some eligibility requirements you'll need to meet, like being a vested participant (meaning you've worked for your employer for a certain amount of time) and having a minimum account balance.
QuickTip: Keep going — the next point may connect.
Step 2: Figure Out How Much You Can Borrow (But Seriously, Don't Take It All)
There are limits to how much you can borrow, usually 50% of your vested account balance or a fixed dollar amount. Don't even think about maxing it out! Remember, this is money you'll need later. Take only what you absolutely need and can comfortably repay.
Tip: Slow down when you hit important details.
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Step 3: Choose Your Weapon (Loan Options, That Is)
Voya offers two types of loans: general purpose loans (for anything you need) with a 5-year repayment term and residential loans (specifically for buying, building, or improving your primary residence) with a longer repayment term. Choose wisely, grasshopper.
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Step 4: Apply, Apply, Apply (But Read the Fine Print First)
You can apply for a loan online, over the phone, or by filling out a form (how retro!). Before you hit submit, make sure you understand the terms and conditions. This includes the interest rate (which you'll be paying to yourself, kind of like a weird financial self-interest tax), the repayment term, and any fees involved.
Remember: Borrowing from your 401(k) can have serious consequences. You'll miss out on potential investment growth, and you could face tax penalties if you don't repay the loan on time.
The Bottom Line: Borrowing from your 401(k) should be a last resort. Explore all other options first, and if you do decide to borrow, be responsible and repay the loan on time. Otherwise, you might end up singing the blues in retirement instead of living it up in Tahiti (sans Uncle Steve).
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