Q:

What interest rates are charged by MassMutual for a 401(k) loan?

A:

Quick Answer

The interest rate on a MassMutual 401(k) loan is typically the federal prime rate plus 1 to 2 percent, according to Standard & Poor's MassMutual loan calculator. The interest rate may vary based on each 401(k) plan's terms, so borrowers should check their plan documents before applying for a loan.

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Full Answer

The prime rate in the United States is approximately 3 percent higher than the interest rate banks use when lending money to each other, as reported by Bankrate. Unlike conventional loans, the principal and interest on a 401(k) loan are deposited back into the borrower's account instead of being sent to a lender.

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