401k Loans Quiz - Test Your Knowledge

1) You can borrow upto ___% of your entire retirement savings from a 401k plan in the form of a loan:

a) 25%
b) 50%
c) 75%
d) You cannot borrow a 401k loan

2) The maximum amount that can be taken as a 401k loan is:

a) $35,000
b) $75,000
c) $50,000
d) $90,000

3) Repayments on a 401k loan must be made in __ equal monthly payments over a __ year period:

a) 24 payments, 2 years
b) 36 payments, 3 years
c) 48 payments, 4 years
d) 60 payments, 5 years.

4) The interest rate to be repaid on the loan is:

a) Prime Rate + 1%
b) Treasury Bill Rate
c) 1 Year Certificate of Deposit Rate
d) 5/1 Jumbo ARM

5) You can repay back the entire amount of the 401k loan without any penalties:

a) True
b) False

6) You can take out multiple 401k loans:

a) True
b) False

7) The minimum amount on a 401k loan that you can take out is:

a) $500
b) $1000
c) $2000
d) $2500

8) If you default on your 401k loan repayments, the penalties are:

a) 10% penalty fee plus local state & federal state taxes
b) 20% penalty fee plus local state & federal state taxes
c) 25% penalty fee plus local state & federal state taxes
d) 30% penalty fee plus local state & federal state taxes

9) Repayment of 401k loans occur through automatic payroll deductions from your paycheck:

a) True
b) False

10) 401k Loans can only be taken out due to emergencies such as death of spouse, big medical bill, etc:

a) True
b) False