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Again, these fees are much lower than the interest on a payday loan, but they arent negligible either. Double Taxation. When you donate to a 401k, you use pretax dollars, and you dont pay tax on the money until you withdraw it. However, when you borrow from a 401k, you have to pay personal loan 1 day approval philippines the loan including the interest with after-tax dollars. This means that you get taxed twice on the interest you pay: once when you deposit it, and again when you withdraw it.
But this extra tax doesnt add up to that much money. If you borrow 1,000 and pay it back at 5 over one year, the interest is only 50 a year. And if you pay 15 in taxes on that 50, your tax hit only amounts to 7.