Where Does 401k Loan Interest Go? 🤔  

Thanks for the comment and the sub. Every situation is different. Don't bang your head against a brick wall. I'll never say having some money set aside in an emergency fund is a bad idea. While recently 4-5% in HYSA is a decent return on money you don't want to risk, for the past two decades 0-2% is not. Some combination of savings and access to a 401k loan can be a good combo. For lots of people, having money sitting idle at a bank, even if it's a HYSA, feels like underutilization. You can watch my video on emergency funds to see different options based on your age ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-rym_F9nnnVw.htmlsi=YKwIzOaRBAOV8tn7

Correct. In actuality, if you were able to time and forecast the market, if you took out a loan at the top and the stock market fell 20-30%, and then you paid the loan back in full, you would be back in with full exposure AFTER the market drop. You would have paid interest to yourself during the payback period as well. However, rather than "timing" a loan, it's best IMO to only use it in one of the scenarios I outline in the full video.

Great question. I explain it in full detail in my video 401k Loans Explained. You can check it out here.👉ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-3ZaKqHL-U_g.htmlsi=NebFj1IGHqc7wQjD

Half is the maximum

To be more specific half of the value up to a maximum of $50,000

Just remember, while the funds are borrowed that amount of money is not earning returns other than the interest in your 401k.

Also you gotta pay it back in 5 years!