An IRA loan generally refers to an indirect rollover. You receive a distribution from your IRA, and you must deposit that amount into a new IRA (or your existing IRA) within 60 days. IRAs don't offer actual loans, so the closest option is using an indirect rollover as a workaround to get a short-term loan.

Is it better to borrow from a 401(k) or IRA?

You can only get a loan from your 401(k), not your IRA. A 401(k) loan can be a good way to borrow money, because you won't need to pay any income taxes or an early withdrawal penalty. While there are interest charges, the interest paid goes back into your 401(k).

Can you borrow money from an IRA?

You can't take out a loan from your IRA, but you can get access to the money for up to 60 days via an IRA rollover. You must repay the entire amount, either to a new IRA or your existing IRA, within 60 days. Otherwise, you'll need to pay income taxes and an early withdrawal penalty.

How long can you borrow against an IRA?

You can borrow against an IRA for up to 60 days with an indirect rollover. This isn't an actual loan -- there's no such thing as an IRA loan -- and is instead a workaround to get short-term access to the money in your account.

IRA Loans: Can I Borrow From My IRA?

If you were hoping to get an IRA loan, here's what you can do.

By Lyle Daly – Updated Feb 18, 2026 at 3:57 PM EST | Fact-checked by Parker Hicks

Key Points

IRA loans aren't available, but an indirect rollover offers short-term access for up to 60 days.
Borrowing from a 401(k) is possible up to $50,000 or 50% of your vested balance.
IRA withdrawals can incur taxes and a 10% penalty unless you're at least 59 1/2 or you qualify for an exception.

Borrowing money from a retirement plan may be tempting: It's already your money, you don't have to get approval, and you won't owe a creditor.

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Hand resting on upper right corner of a piece of paper reading "IRA" as if to flip it over — Image source: Getty Images.

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Using an indirect rollover for a short-term IRA loan

You can't get an IRA loan, but you can make an indirect rollover. This is different from a direct rollover, where a distribution from a retirement plan is sent directly to another retirement account.

By contrast, an indirect rollover occurs when you receive a distribution from a retirement plan (in this case, an IRA). You're then responsible for depositing it into an IRA within 60 days. If you stick to that window, you won't incur an early withdrawal penalty, so this opens up the opportunity to borrow from an IRA on a short-term basis.

If you need money and know you'll be able to pay it back within 60 days, you can initiate an indirect rollover, use that money temporarily, and then pay it back to avoid a penalty. You don't even have to deposit the funds into a new IRA; you can stick them right back into your existing IRA.

You're limited to one IRA rollover per 12-month period, and the strategy does have risks. If you don't deposit the money back into an IRA within the 60-day time frame, the amount removed will be treated as a distribution, which means it will be subject to a 10% early withdrawal penalty. But if you just need a short, temporary influx of cash, using an indirect IRA rollover as a loan could work.

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Penalty-free IRA withdrawals

Since you can't get an IRA loan, you may consider withdrawing money instead. Be aware that if you take money out of your IRA, you'll be taxed at your ordinary income tax rate unless it's a qualified Roth IRA withdrawal. You may also be subject to a 10% early withdrawal penalty unless you qualify for an exception, including any of the following:

You're at least 59 1/2
You meet the IRS definition of disabled
You're taking substantially equal periodic payments
You're withdrawing up to $10,000 toward the purchase of a first home
You're paying medical expenses that exceed a certain percentage of gross income
You're unemployed and using the money to pay medical insurance premiums
You're paying past-due taxes because you're subject to an IRS levy
You're covering eligible higher-education expenses

If you have a Roth IRA, you are always permitted to withdraw the money you've invested (your "contributions") without incurring penalties. Penalties only apply to the early distribution of gains.

Consider a 401(k) loan

Although you cannot borrow from your IRA, it's generally possible to borrow from your 401(k) -- depending on your 401(k) plan's rules. Normally, you may borrow up to $50,000, or 50% of your vested account balance.

Before borrowing or withdrawing from a 401(k) or IRA, however, carefully consider the risk to your retirement security and explore other available options.

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

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