In one single season, regarding that-fifth away from mortgage-qualified personnel within our attempt had a minumum of one funds outstanding. However, among players terminating employment having the finance, 86 % did not repay its the loans (the others paid down their account loans so because of this prevented default). Due to the fact members defaulting on their package financing totaled as much as 10 % of the many users with the financing, i guess you to definitely on the ninety % of users paid its finance along side four-12 months months seen. 23

Table 5

Analytics evaluating professionals whom defaulted in place of paid the funds appear in Desk 6 , along with investigation towards all the borrowers and all sorts of mortgage-qualified bundle professionals. Brand new take to away from defaulters contains 130,295 members during the 401(k) preparations whom ended a job that have at least one financing a good. 24 Compared to the most other plan consumers, these were a little more youthful, got shorter jobs tenure, and you may kept straight down stability. People that defaulted to their finance including had low income, all the way down balances, along with shorter non-later years riches, compared personal loans online South Carolina to those whom paid off their funds into making its jobs.

Table 6

To compare employees who terminated employment and defaulted on their 401(k) loans with those leaving employment who repaid their loans in full more rigorously, we next estimate a multivariate Probit model where the dependent variable, D_i,j,t, refers to the probability of individuals terminating their jobs and defaulting. As indicated in Table seven , the mean of the dependent variable is 86 percent. 25 Regressors are identical to those in our previous examinations of loan probabilities and amounts borrowed.