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What to Know Before Taking a 403(b) Loan

A 403(b) loan should be your last resort because it comes with major problems and risks.

By Motley Fool Retirement TeamUpdated Nov 23, 2024 at 1:25 PM

Key Points

  • 403(b) loans offer access to funds without a credit check and favorable terms compared to other loans.
  • Repayments on a 403(b) loan do not count toward annual contribution limits but are made with after-tax dollars.
  • Failing to repay a 403(b) loan can result in heavy penalties and taxes, akin to an early withdrawal.

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