If the Plan allows for the suspension, then suspension of loan payments while on an approved leave of absence will last for no more than 12 months. IRS rules do not allow the term (duration) of a loan to exceed 5 years (30 years for a home-purchase loan). If your suspension causes your loan term to exceed the aforementioned statutory limits, you must make a balloon lump sum payment upon your return from your leave of absence to catch-up on missed payments or face default on the outstanding balance at the 5-year mark (30-year mark for home-purchase loans). A loan default has no consequences outside of the Retirement Plan (i.e. no effect on your credit score). The outstanding balance of the loan is converted into taxable income for the year of the default and a Form 1099-R is issued (at the end of January the following year) indicating the tax liability for the Tax Year in which the loan default occurs.