We strive to make the loan process as simple and quick as possible.
The entire process, from application to receiving loan proceeds, generally occurs within 7 to 10 business days. Please contact us at (216) 771-4242 if you don’t hear from our office within 2 business days of submitting your online application.
To use, your plan must allow loans to participants. Check your plan’s Summary Plan Description (SPD) if you are unsure.
Participants with balances at Nationwide can check vested account balance by clicking here. If you have not accessed your Nationwide 401k account online, click the following link for PDF instructions to set up your account.
You can generally borrow up to 50% (or one half) of your vested account balance or $50,000 whichever is less. Generally, the minimum amount permitted is $1,000.
Your vested account balance is the portion that is non-forfeitable. You are always 100% vested in any elective contributions you have made to the plan, but employer contributions of match or profit sharing may be subject to a vesting schedule.
By taking a loan against your account balance, you are entering into a payroll deduction agreement with your employer to repay your loan.
You usually have a maximum of five years over which to repay the loan.
After completing the online loan application, MGO will communicate to you the approved or denied status of your loan. Participants with approved loans receive paperwork for completion. After submitting completed paperwork, the loan proceeds are released to you. Proof of hardship may be required. If required, it is requested when loan paperwork is provided.
There is a $100 fee for the loan paperwork (loan note and amortization schedule). In addition, there is a $25 per year charge, (per the term of the loan). This is automatically deducted from your account balance at the time loan withdrawal occurs.
The interest payments are made to your account. However, since loan payments are an after tax deduction, the interest you pay back will be taxed again when you withdraw it later.
At termination, you must pay back the balance of the loan. Otherwise, the outstanding principle becomes taxable income. If you are under the age of 59 1/2 at that time, you may also incur a 10% early withdrawal penalty on the amount.
This information is intended to be general in nature and for informational purposes only. Your specific circumstances and request are subject to review before approval. It is recommended that you consult with your tax advisor to determine how taking out a retirement plan loan will affect your tax situation.