MMC Benefits Handbook
The Loan Administrator establishes rules for the loan program. Subject to those rules:
- you can take a loan for any reason.
- generally, the maximum length of your loan is 5 years; if the loan is for the purchase of a primary residence, the maximum length of the loan is 15 years.
- loan repayments are made by payroll deduction.
- interest rate is prime rate plus 1% based on the prime rate in effect at the time your loan is processed.
- there are no fees for taking a loan.
Your Vested account balance is security (serves as collateral) for the loan. If you have any fixed Company contributions, Roth 401(k) contributions and Roth rollover contributions and earnings, Roth catch-up contributions and earnings, and in-plan Roth conversion amounts in the Plan, these amounts will be applied as collateral for a loan but will not be a source of funds for the loan. Accordingly, if you have not made any employee contributions to the Plan and your account balance consists solely of fixed Company contributions, you are not eligible to take a loan under the Plan.
When you authorize the loan request online, it binds you to the terms and conditions of the loan, the Loan Program and the loan disclosure statement.