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does the interest I pay back on the loan accrue to me? As in, am I really lending myself the money and paying myself interest?

Yes. And no. It's not really a loan at all. It's really a withdrawal that must be replaced a month at a time. The "interest" is actually just extra money that gets contirbuted to your account.

The key is to see what happens to your account when you take out the loan. For example, if your 401k has 100K in the S&P index fund (only), and you borrow 50K, and the s&P has a 20% gain, does your account see a 20% gain on 100K or a 20% gain on 50K?

In my 401k with a major Fortune 500 company, it was the latter. And it way quite clearly spelled out in the plan documentation--once I knew to look for it.

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