Calculator
401k Loan Calculator
Estimate 401k loan payment and the opportunity cost of lost investment growth on the borrowed amount.
AnswerCanvas Calculator
401k Loan Calculator
Figures on this calculator reflect US federal tax, retirement account, and benefit-program rules and are shown in USD regardless of your location, since converting the display currency would misleadingly imply the underlying thresholds apply elsewhere too.
Monthly payment
$297.02
Estimated opportunity cost of lost market growth: about $7,039.92 over 5 years.
- Monthly payment
- $297.02
- If left invested at 8.0%
- $22,039.92
- Estimated opportunity cost
- $7,039.92
- Interest rate (paid to yourself)
- 7.0%
Result chart
Formula
401(k) loan interest is paid back to YOUR OWN account (not to a bank), which sounds appealing - but the borrowed amount is removed from the market during the loan term, missing out on any investment growth it would have otherwise earned. Opportunity cost = what the borrowed amount would have grown to if left invested at your expected return, minus the original amount - this represents the real economic cost even though you're technically "paying yourself" interest.
Worked example
$15,000 borrowed at 7% (paid to yourself) over 5 years, with an 8% expected market return if left invested: monthly payment is about $297.02, but the estimated opportunity cost of missed market growth is about $7,039 over the 5 years.
Money-page insight
The "you're paying yourself interest" framing of 401(k) loans is technically true but can be misleading - the REAL cost isn't the interest rate, it's the OPPORTUNITY COST of the borrowed amount missing market growth while out of your account, which is why a 401(k) loan can be more expensive than it initially appears, especially if the market performs well during your loan term.
Calculation history
Stored locally on this deviceHow the 401k loan calculator works
How to use this calculator
Adjust the assumptions on the left and the result updates instantly. Use the summary as a planning estimate, then compare it with quotes, local rules, lender disclosures, or professional guidance for decisions involving taxes, loans, construction, or health.
Learn more
Stage 1 - Inputs
Collect the required 401(k) loan cost and opportunity cost values and confirm that each value is physically and logically possible.
Stage 2 - Formula
401(k) loan interest is paid back to YOUR OWN account (not to a bank), which sounds appealing - but the borrowed amount is removed from the market during the loan term, missing out on any investment growth it would have otherwise earned. Opportunity cost = what the borrowed amount would have grown to if left invested at your expected return, minus the original amount - this represents the real economic cost even though you're technically "paying yourself" interest.
Stage 3 - Substitute values
Replace each variable in the formula with the current input value. This keeps the calculation transparent and easy to audit.
Stage 4 - Intermediate calculations
Calculate the supporting values first, such as totals, rates, balances, volumes, or ratios, before producing the final result.
Common mistakes
- Mixing units, such as monthly and annual rates, inches and feet, or gross and net income
- Entering rounded guesses when exact quotes or measurements are available
- Ignoring fees, taxes, risk factors, local rules, or physical constraints
- Treating an estimate as a final professional decision
Tips
- Change one input at a time to understand sensitivity
- Use conservative assumptions when the result affects safety, debt, taxes, or health
- Save or print the result with assumptions before comparing alternatives
- Recheck units whenever a result looks surprisingly large or small
401k Loan Calculator mastery
Estimate 401k loan payment and the opportunity cost of lost investment growth on the borrowed amount.
Use this loans calculator as a working model: enter realistic inputs, read the primary answer first, then use the supporting rows to understand what changed and why.
Read the result correctly
Treat the primary answer as the headline result and the supporting values as the evidence trail behind it.
Improve accuracy
Small input changes can shift the output. Recheck units, time periods, percentages, and any assumptions before using the result.
Use it professionally
Save or print the result with the inputs visible so the calculation can be reviewed, repeated, or compared later.
Expert suggestions
Professional perspective
How to get more value from the 401k loan calculator
Loan calculators are most helpful when they reveal the cost of time. Extending a loan can reduce payment but increase total interest.
Watch total interest
A smaller payment can feel easier while quietly increasing the total cost of borrowing.
Confirm APR and fees
Origination fees, financed fees, and APR differences can make two similar offers very different.
Model extra payments
Even modest extra payments can shorten payoff time when they reduce principal early.
Learning path
What to understand next
- Principal
- APR vs interest rate
- Term length
- Early payoff strategy
Loans insight guide
Understand the answer
Use the 401k loan calculator as a decision aid, not just a number.
Loan calculators reveal the relationship between borrowed amount, rate, payment, term, and total interest. Small rate or term changes can have large long-term effects.
The result estimates payment burden, payoff timing, interest cost, APR impact, or debt-to-income pressure.
Loan balance, APR, compounding method, term, fees, minimum payment rules, and extra payments drive most differences.
Use the true APR when fees are included and confirm whether payments are monthly, biweekly, or another schedule.
A lower monthly payment can hide a higher total cost if the term is stretched or fees are added.
Accuracy checklist
- Compare total paid, not only monthly payment.
- Check whether fees are financed or paid upfront.
- Confirm APR, rate type, and payment frequency.
- Test the effect of an extra payment before choosing a payoff strategy.
How professionals use this
- Use side-by-side scenarios for term and rate comparisons.
- Preserve inputs when discussing options with a lender.
- Stress-test payments against income changes.
- Review legal loan documents before relying on any estimate.
Frequently asked questions
- Why is a 401(k) loan not really "free" even though I'm paying interest to myself?
- The interest you pay does go back into your account, but the PRINCIPAL amount is out of the market for the loan duration, missing whatever growth it would have otherwise earned - this opportunity cost is the real economic cost, separate from and often larger than the interest rate itself.
- What happens if I leave my job with an outstanding 401(k) loan?
- Many plans require the outstanding balance to be repaid quickly (sometimes by the tax filing deadline) or it may be treated as a taxable distribution (potentially with an early withdrawal penalty if you're under 59½) - this is a significant risk to understand before borrowing, especially if job stability is uncertain.
- Are there limits on how much I can borrow from a 401(k)?
- Yes - federal rules generally limit 401(k) loans to the lesser of $50,000 or 50% of your vested account balance (with some exceptions for smaller balances) - check your specific plan's rules, since not all plans allow loans at all.
- Why is total interest different from the monthly payment?
- Monthly payment shows short-term cash flow. Total interest shows the lifetime borrowing cost created by the rate, balance, and repayment term.
- Is the lowest loan payment always best?
- Not always. A lower payment may require a longer term, which can increase total interest and keep the debt active for longer.
- What should I compare before accepting a loan?
- Compare APR, fees, term, monthly payment, total interest, prepayment rules, and whether fees are paid upfront or financed into the loan.
- How do extra payments change a loan result?
- Extra payments reduce principal faster. When principal falls earlier, less interest accrues over time, which can shorten payoff time and reduce total cost.
- Why can APR be more useful than interest rate?
- APR can include certain loan costs and fees, making it a better comparison number when two loans have different upfront costs or pricing structures.
- What does the 401k Loan Calculator calculate?
- Estimate 401k loan payment and the opportunity cost of lost investment growth on the borrowed amount.
- How should I read the 401k Loan Calculator result?
- Read the primary answer first, then review the supporting values, formula notes, assumptions, and expert suggestions. The supporting values explain why the answer moved and which inputs deserve more attention.