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Practice Management

403(b) Loans After a Loan Default

Q. If you default on a loan taken from a 403(b), can you later take another?

A. A 403(b) account vendor can have a rule that once one defaults on a loan that one cannot have a second one. But they must permit one to pay it off with after-tax dollars into the 403(b) plan. It all depends on the vendor’s loan policy; one should make sure one has a copy.