- 1). Contact your 403b plan administrator to determine if your 403b plan allows loans. The IRS permits 403b plans to offer loans but does not require that the 403b allow loans, so some 403b plans do not.
- 2). Calculate the maximum you are allowed to borrow by multiplying your 403b plan's value by 0.5. The smaller of the result or $50,000 is the maximum you can borrow. For example, if your plan was worth $70,000, you would multiply $70,000 by 0.5 to get $35,000. Since $35,000 is smaller than $50,000, your maximum loan amount is $35,000.
- 3). Contact your lender to request a loan. You may be able to request the loan over the phone or you may be required to fill out a loan request form. You will have to provide your identifying information, such as your name, address and account number, the amount of the loan and how you want the funds transferred to you, such as directly into an account or via a check.
- 4). Repay the loan over no more than five years by making quarterly payments. If you choose, make more frequent payments. If you fail to repay the loan, the IRS will treat any unpaid amounts as a distribution from your 403b plan, which will cost you taxes and possibly early withdrawal penalties.
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