The 401k plan im in imposes a $3 monthly fee for having a loan with them on top of a 12% interest you pay back and you can't pay extra on it. Also theres a $50 fee just for getting the loan!Sunwest federal credit union 7.99% fixed rate signature loans much cheaper and not line Schwab pocket full of fee It isn't possible to pay additional amounts on a 401K, but the entire remaining balance can be paid. This isn't a restriction unique to Schwab. $3 monthly fee and $50 initiation fee aren't unreasonable management fees. The interest payments don't go to Schwab. If the borrower can qualify for a signature loan, it is probably a better choice.