Plan allows for multiple loans. Participant had 2 outstanding loan balances as of June 2002 one amount of $16,000 and $29,300.00. The participant has paid off the $16,000.00 loan in August 2002 and has a current outstanding balance on the $29,300.00 loan of $24,460.00.
His vested account balance exceeds $100,000 so he would be eligible for a maximum loan of $50,000.00. So, with the two prior year loans do we have to take in the aggregate amount of the loans as of June 2002 totaling $45,300???? If so, then the calculation is the highest o/s loan balance would be $45,300 - $24,460 (current balance)= $20,840. Then maximum loan of $50,000 - $20,840= $29,160.
Take the $29,160-24,460=$4,700.00 available for new loan.
Please anyone confirm if this is the right basis.