Repaying the Solo 401k loan

I just took a loan from my Solo 401k.  How soon do I need to make payments for the loan? Also, I want to set up my repayment to be electronic funds transfer from my personal bank account at one bank directly into my Solo 401(k) Trust account at another bank.  Is this OK?

Answer:

If you chose monthly payments on your Solo 401k loan application, the first loan payment should be made a month after the date on your loan application. If you chose to pay back the loan on a quarterly basis, then payments need to be made every three months from the application date.

Note that your loan documentation must include the amortization schedule. Once the loan is approved, you cannot change the amortization schedule.

For loan repayments, it's a good idea to have your payments directly transferred from your personal bank account into your Solo 401(k) bank account. This will ensure you don’t miss payments in the future.  Late payments can result in tax and penalties becoming due on the loan proceeds.