How do I pay back a loan?
I borrowed money from my 401(k) with the agreement to pay back the loan though future paychecks. The company I worked for uses the third party ADP to handle their 401(k) department. Currently, the company is being bought over by another company, and my current company will no longer be taking the bi-weekly payment out of my checks. The new company said can't take over the loan, since its not their company,or thing to deal with. I contacted ADP and they said that I need to continue paying the whole balance of the loan to my company until December, but then afterwards take a 10%+ penalty fee for any unpaid balance, since I need to go though my company to pay back my loan, which will soon not exist (the company).
I can't pay off the whole loan in 1 payment, which is why the agreement to pay a little per check. The new company won't have anything to do with it. I don't think that is fair. Any thoughts? Suggestions?
no, well the 10%+ penalty would be from the IRS, for taking out money from the 401, instead of keeping it in a tax-shielded account, such as 401 or IRA. It is what would normally happen, if not for the installment type plan that my company (and not the new company) has for a form of paying it back.