Since you will have separated from service, the loan will be satisfied by making an offset distribution. This is essentially the same a distribution paid to you which is immediately turned around and used to pay off the loan. How long the plan takes to process the distribution is somewhat a matter of plan procedures, but if you desire that the distribution take place in 2016, you can ask the plan to immediately make the offset distribution and they *should* be able to process the distribution by the end of the year. If you don't make an explicit request for the distribution, the timing will likely be dictated by plan procedures.
Note an offset distribution is eligible for rollover. If you can come up with the money by the 60th day following the date of the distribution, you can roll up to the amount of the distribution into another retirement account and continue to defer the taxes.
