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Chapter 17. Borrowing from Yourself > What's It Gonna Cost You? - Pg. 170

Borrowing from Yourself 170 Warning! If you're married, your spouse may have to sign off on a loan from your 401(k). Check if your plan's rules require spousal consent before you need the loan and be sure your spouse thinks that the loan is a good idea or he or she probably won't sign off on it. Your spouse is not co-signing for the loan, just consenting to it. For example, if you have $10,000 in your account and you need $4,000 to pay tuition bills for your spouse who is getting her master's degree, you should have no problem. The $4,000 is obviously less than $50,000 maximum, less than one half of the amount in your account, and more than $1,000 minimum. How many loans you can have outstanding at any one time depends on how the plan document reads. The people in Washington place no limit on the number of loans allowed, but most employers allow only one outstanding loan at a time. Even if your employer allows more than one outstanding loan, you'll still be limited in how much you can borrow by what's in your account. How Do You Borrow? Some companies will allow you to walk into the benefits department and verbally ask for the loan. Other companies want you to fill out a very formal application. If loans are available in your 401(k)