When in need of emergency funds, lots of employees turn to theirretirement plans for a loan—but that can threaten their eventualretirement security, since sometimes workers fail to pay themback—either because of job changes that escalate the repaymentschedule or due to financial hardship.

But there's another option in town: Kashable, an online loanservice launched last year that provides loans to the employees ofparticipating employers and repaid via automatic payrolldeductions.

While Kashable launched in 2015 as a socially responsiblealternative to high-cost payday lenders, it's now available throughMassMutual Life Insurance Co.'s BeneClick! employee benefitsexchange.

The advantages to employees are obvious: Kashable's loan programis available as an employer-sponsored voluntary benefit. Loans canbe obtained online directly through Kashable without having to fillout forms or visit a bank. Employees are prequalified for credit,based on their employment, and the amount of credit they qualifyfor is based on their ability to repay. And the interest rates arecertainly cheaper than payday loans: rates start at 6% APR with a6- to 12-month term.

But loans from retirement plans often charge the prime rate plus1% interest—and then there's the tax penalty should an employeechange jobs and simply not pay back the loan. Add to that the lostopportunity cost of pulling money out of investments—often early ina career, when money may be tighter but the value of compounding ishigh—and the lower interest rate may prove to be the least of thecosts involved in a retirement plan loan.

Adding Kashable's credit service to BeneClick! is aimed attackling one of the biggest sources of stress in the workplace:personal financial issues. The 2015 MassMutual Employee BenefitsSecurity study found that 37% of workers find managing theirpersonal finances “somewhat” or “very difficult” and 40% saypersonal financial problems are a distraction at work.

BeneClick!, powered by Maxwell Health's benefits technologyplatform, is an integrated employee benefits exchange thatintegrates MassMutual's MapMyBenefits tool to help employeesprioritize retirement savings, health care, and insuranceprotection benefits based on their individual life stages.

Benefits Pro