Hardship loans
Hardship loans are available to eligible participants who demonstrate that a hardship (as defined below) exists, and that a hardship loan is necessary to relieve the hardship. Additional information on hardship loans will be provided at the time you request a loan application.
A "hardship" means an immediate and heavy need resulting from one of the following:
- Expenses for medical care for you, your spouse, or your dependents;
- Costs (excluding mortgage payments) directly related to the purchase of your principal residence;
- Payment of tuition, related educational fees, and room and board expenses for up to the next 12 months of post-secondary education for you or your spouse, children or dependents;
- Payments necessary to prevent eviction from your principal residence or to prevent foreclosure on the mortgage on your principal residence;
- Payments for burial or funeral expenses for your deceased spouse, parent, children or dependents;
- Expenses (of the type that would qualify for a casualty loss tax deduction) for the repair of damage to your principal residence.
- Expenses or losses you incur because of a federally-declared disaster if you live or work in the disaster area.
To qualify for a hardship loan, you must be an active employee of the Company or an affiliate of the Company.
The minimum amount you may borrow is $1,000.
The maximum amount you may borrow is whichever of following amounts is the smallest:
- The sum of the balances in your pay deferral account, Roth pay deferral account, rollover account, and your Roth rollover account
- One-half your vested account balance
- $50,000 (reduced, if you have had a hardship loan outstanding at any time during the past 12 months, by the highest balance of that loan during that 12-month period)
- The amount necessary to alleviate your hardship
You may not have more than one hardship loan outstanding at any time. Not more than one hardship loan will be approved in any 12-month period.
Your hardship loan will be secured by 50% of your vested account balance (measured as of the time you take out the loan).
The interest rate charged on your hardship loan will be one percentage point above the prime rate in effect on the first business day of the month in which you apply for the hardship loan.
The maximum period of repayment for any hardship loan is 54 months, except if the hardship loan is for the purpose of paying the costs (excluding mortgage payments) directly related to the purchase of your principal residence, in which case the maximum period of repayment is 174 months. A loan account will be set up in your name under the Plan. Your repayments of principal on the loan, together with interest, are made through payroll deductions. The amount of each principal repayment reduces the amount in your loan account and is invested, along with the interest you pay, in the Plan's investment funds in accordance with your investment election for new Plan contributions.
The amount of your hardship loan may be prepaid in full at any time without penalty. Partial prepayments are not allowed.
If your employment terminates, any outstanding balance on your hardship loan will become due and payable, unless you elect to continue making the required installment payments as permitted under loan procedures adopted by the Plan Administrator. If your hardship loan is not repaid by the earlier of:
- the end of the calendar quarter following the calendar quarter in which your employment termination occurs,
- the end of the calendar quarter following the calendar quarter in which your most recent unpaid payment was due, or
- the valuation date used to determine the amount of your distribution from the Plan.
Your vested account will be used to repay your loan, unless you elect to continue making the required installment payments following your termination from employment.
If a hardship loan is not repaid in accordance with the terms of the promissory note and there is a default, the Plan may use your vested account to repay your loan. (However, amounts in your pay deferral account or Roth pay deferral account will not be used for this purpose until the time they could otherwise be distributed to you.)
You may be charged a processing fee for the cost of processing your loan as well as an annual loan maintenance fee.