Occasionally, a need may arise for the participant to reamortize the terms of an existing loan. For example, the participant may terminate employment with the firm and want to continue paying back the loan on a monthly, rather than semi-monthly basis.
An important note: The term of a loan may be extended beyond its original due date, even if the original term of the loan was less than the maximum allowed (e.g., for a general loan the maximum term is five years and for a residential loan the maximum term is 30 years). However, in no event may the new loan term exceed the maximum period from the loan’s issuance date.
The loan cannot be reamortized using a different interest rate.
Step 1 – Complete Loan Reamortization Request Form
In order to reamortize an existing loan, the participant will need to complete a Loan Reamortization Request Form and submit it to you for your review and for signature by the authorized plan representative. Please review the instructions provided under “Requests.” The participant should complete Sections 2 and 3 and sign/date the form in Section 4. If applicable, spousal consent should be obtained in Section 5. If you want the Program to issue a copy of the new amortization schedule, please complete the information on the line provided in the second paragraph on page 1.
Once the Program receives the completed, signed Loan Reamortization Request Form, we will send you a new amortization schedule by fax if you have requested one so that you may update your payroll records with the new payment amount/terms or provide those terms to a terminated participant. You can always use your Sponsor Web access to view the new loan terms.
Step 2 – The Program’ s Role
Upon receiving the completed, signed Loan Reamortization Request Form, the Program will update the loan records with the new loan terms. At that time, the participant (or the firm) may begin sending payments under the new amortization schedule.