What You Need To Know About Taking a Loan

While you are working for a participating Y, you can borrow money from your accounts in the Savings Plan—the 403(b) Smart Account and the Rollover Account. You cannot borrow from any accounts in the 401(a) Retirement Plan.

 

If you have both a Rollover Account and a 403(b) Smart Account, the amount you borrow will be split proportionately between the two accounts. Since you are borrowing from your own accounts, all interest that you pay will be credited back to your accounts.

Log In To Your Account to apply for a loan.

 

Loan Information
  • To take a loan, you must be actively employed at a participating YMCA.
  • You may have only one outstanding loan at a time.
  • The maximum amount you may borrow is 50% of your total account balances in the Savings Plan, or $50,000, whichever is less.
  • The $50,000 maximum will be reduced by the amount of your highest outstanding loan balance of the last 12 months if you took another loan from the Savings Plan.
  • The minimum amount you may borrow is $1,000. (If the total balances of your 403(b) Smart Account plus your Rollover Account is less than $2,000, no loan would be available.)
  • The interest rate will be fixed at 1% over prime as quoted in the Wall Street Journal on the date the application is submitted to the Fund.
  • The loan must be repaid in five years or less.
  • Loan terms (payment amount and date) are set at the time the loan is taken and cannot be changed afterwards.
  • There is a loan origination fee of $50 that will be withdrawn from your accounts in the Savings Plan.
  • Your spouse must give written consent if your total Savings Plan balance exceeds $5,000.
  • The normal processing time for a loan is at least 30 business days, assuming that all required paperwork is received on time and in good order.

 

Loan Repayment
  • Repayment is by payroll deduction.
  • If you do not have enough money in your paycheck to cover the loan payment or do not receive a paycheck on a payroll date, you must send the payment due directly to the Fund.
  • Loan repayments may be suspended during a period of absence for military service.

 

If you Cannot Pay Back The Loan (Default)
  • If any payment is not paid within 90 days of the due date for the payment, the loan will be considered in default.
  • If you leave employment with a participating Y, or if your Y ceases to participate in the Savings Plan, you must repay the outstanding loan balance. After 90 days the loan will be considered in default.
  • Once a loan is considered in default, the unpaid balance, plus the accrued interest, will be deemed a taxable distribution.

 

Important Note: If you have an outstanding loan you must pay it off in full within 90 days of the oldest outstanding due date or your loan will be in default, resulting in a taxable distribution. When your Y has made final contributions to your account and notified the Fund of your employment termination, the Fund will mail you a letter with your outstanding loan balance.