401(k) Loan Outstanding Rate
13% — holding steady; 1 in 8 workers owe money back to their own 401(k)
What is the current 401(k) Loan Outstanding Rate?
13.0% of 401(k) plan participants currently have an outstanding loan against their retirement account, according to Vanguard data. Unlike hardship withdrawals, 401(k) loans must be repaid with interest. However, if the borrower leaves their employer, the full balance typically comes due within 60 days — effectively converting the loan into a taxable withdrawal. Source: Vanguard How America Saves.
The share of 401(k) participants carrying an outstanding loan against their retirement account has sat at 13% for four straight years. A quiet plateau that looks nothing like the emergency it describes.
Vanguard's How America Saves report, built on roughly 5 million retirement plan participants, shows 13% currently have an outstanding 401(k) loan. That is the same reading as 2021, 2022, and 2023. The rate has not budged.
A 401(k) loan is a last resort dressed up in reasonable language. The borrower pays interest to themselves, yes. But the money is pulled out of the market during the years compound returns matter most, and if the borrower loses their job, the loan typically becomes due within 60 to 90 days — and taxable as an early distribution if it isn't repaid.
One in eight workers is running that math. And has been, every year, since the pandemic savings surge drained out. This is steady-state behavior now. A plateau, not a spike.
The flatness is the story. The Cannibalization Rate — 401(k) hardship withdrawals — has roughly tripled from pre-pandemic levels (2019: 2.0% of participants; 2025: 6.0%), a 200% increase. Loans have held at their elevated plateau. Together they describe the same pattern: households eating retirement to fund today. The Buffer was supposed to absorb this kind of shock. The 401(k) is absorbing it instead.
Explore Further
Is this happening to you?
Have you borrowed against your 401(k) or thought about it?
How has 401(k) Loan Outstanding Rate changed over time?
Most affected counties
Counties with the highest overall financial distress scores in the County Distress Index.
Explore all 3,144 counties →| Period | Value | YoY Change |
|---|---|---|
| 2024 | 13% | +0.0 pts |
| 2023 | 13% | +0.0 pts |
| 2022 | 13% | +0.0 pts |
| 2021 | 13% | — |
| 2018 | 15% | — |
Frequently Asked Questions
What share of workers have outstanding 401(k) loans?
13.0% of 401(k) plan participants currently have an outstanding loan against their retirement account, according to Vanguard. This is separate from hardship withdrawals — loans must be repaid with interest.
What happens to a 401(k) loan if you lose your job?
If the borrower leaves their employer (voluntarily or involuntarily), the full loan balance typically comes due within 60 days. Failure to repay converts the loan into a taxable distribution with a 10% early withdrawal penalty for those under 59½.
Where does the data come from?
Vanguard's annual How America Saves report tracks 401(k) loan outstanding rates across approximately 5 million participant accounts.
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