What is a 401(k) Loan? - Definition

What is a 401(k) Loan? - Definition
A 401(k) loan is a loan that can be taken against the vested funds in an employee's 401(k) account. This type of loan usually has a short repayment term of 1 to 5 years. However, if the funds are to

be used for a downpayment on a home purchase you may be eligible for a 30 year repayment term. Rules for withdrawal of funds vary based on the plan administrator.