Changing jobs can feel like a fresh start, but an outstanding 401(k) loan can follow you right out the door. Depending on the rules of the plan, leaving your employer may trigger a demand for repayment, turn the unpaid balance into a distribution, or create a surprisingly important tax deadline.
That sounds dramatic, but the situation becomes much less intimidating once the moving parts come into focus. The big question involves what happens to the unpaid balance, because a 401(k) loan does not automatically transfer to the next employer’s retirement plan just because the employee changes jobs.
