diff --git a/README.md b/README.md
index e308016..fd91a41 100644
--- a/README.md
+++ b/README.md
@@ -63,7 +63,7 @@ const loaderConfig = {
   bundle: false,
   warnings: true,
   watch: false, // indicates if webpack is in watch mode
-  output: 'output',
+  output: 'output', // if not specified and spago = true, then as reported by `spago path output`
   src: [
     path.join('src', '**', '*.purs'),
     // if pscPackage = true
diff --git a/src/index.js b/src/index.js
index ff13302..2e075bb 100644
--- a/src/index.js
+++ b/src/index.js
@@ -139,7 +139,7 @@ module.exports = function purescriptLoader(source, map) {
     }
   })(loaderOptions.pscPackage, loaderOptions.spago);
   
-  const outputPath = loaderOptions.spago ? getSpagoSources() : 'output'
+  const outputPath = loaderOptions.output || (loaderOptions.spago ? getSpagoSources() : 'output')
 
   const options = Object.assign({
     context: webpackContext,