The IRS also stipulates that the loan must be repaid in equal payments occurring at least quarterly, and that it must be repaid in full within five years. Again, individual plans may have stricter rules.
Once you've taken your withdrawal, you can use the cash for whatever you need. In the meantime, you should be enrolled to make regular loan repayments from your paycheck equal to the minimum payment required to meet the terms of the loan agreement.
Unlike regular contributions to your 403(b), loan repayments do not count toward your contribution limits. The contribution limit for 2024 is $23,000, and increases to $23,500 in 2025.
Those 50 and older can contribute up to $30,500 in 2024, thanks to additional catch-up contributions. In 2025, workers ages 50 to 59 and 64 and older can contribute up to $31,000 to a 403(b) with catch-up contributions. Those between the ages of 60 and 63 are eligible for an even higher limit, bringing the maximum contribution in 2025 to $34,250.
Furthermore, the interest portion of the loan payment is paid with after-tax dollars, whereas regular contributions are typically pre-tax dollars.
If you have the cash to repay the loan early, you can talk to the plan administrator about creating a payoff statement to pay the remaining balance.