subject: Does A 401k Distribution Count As Income For A Payday Loan? [print this page] It is hoped that when you retire you will have enough money to live comfortably during your golden years. After all, you worked forty or fifty years putting away cash in various financial vehicles to make sure the pot was big enough to see through the last few decades of your life. However, sometimes even the best laid plans go awry and you need access to cash fast. Even though you have money in the bank, it is doled out in fixed amounts. You decide to get a payday loan but wonder if the money you get from your 401K and other financial plans would count as income.
The main thing that payday loan lenders care about is your ability to repay the money they loan to you. You can borrow as much as $1500 from a lender but they will not give you a dime if they do not think you will be able to pay it back. If you can show that you receive income on a regular basis that meets or exceeds their minimum income level, then you should be able to get approved for the loan. For example, the loan company requires that you receive a minimum of $800 per month from your income source. Providing check stubs or bank statements that show you are receiving that amount of money from your 401K may be all they need to approve you.
Like any other income source, the amount of monthly income you receive from your 401K will determine the amount of the loan you will qualify for. Each company has their own formula for figuring out how much you qualify for. Interestingly enough, as you take out loans from a particular company and pay them off, the company may raise your loan limit. This means if you don't get the exact amount you are looking for, you can try different lenders to see if you can get a higher amount. You can also work to build up your credit with one particular lender.
The important thing is to make sure that any money you do borrow can be covered by the payments you receive from your 401K and other sources. Shop around for the best rates and always try to pay your loan off in full. Being responsible in your use of payday loans means you will always have a financial resource you can turn to in your time of need.
