About TSP Loan basics
You are permitted to borrow money from your TSP account if you are an active TSP participant and a current federal civilian worker or member of the uniformed services. You reimburse the credit with revenue in standard installments through finance derivation assuming you’re still in government administration, or by direct charge, check, or cash request in the event that you’ve left bureaucratic assistance. The interest rate is the same as the G Fund interest rate for the month before you request the loan, and it stays the same throughout the duration of the loan.
Current TSP loan interest rate: 3.625%
How to apply for a TSP Loan
To begin the application process for a Thrift Savings Plan loan, log in to My Account or get in touch with us through the ThriftLine. Please read the information on this page in addition to the TSP booklet Loans (206 kb) before you do anything. Make sure you read everything carefully to make sure you know everything about the rules and how to qualify.
Consider the impact on your retirement savings if you decide to take out a TSP loan. It’s true that you’ll have to pay interest on the loan, but by temporarily withdrawing money from your account, you’ll miss out on the compound interest that could have been earned.
There’s also a one-time fee that comes out of the loan amount and is never returned to the account:
- $50 for a general purpose loan.
- $100 for a primary residence loan.
- Remember that the purpose of contributing to the TSP is to provide you with income in retirement, so it pays to think twice before you take a TSP loan.
Procedure to take Thrift Savings Plan loan Process
You need to know about the types of Thrift Savings Plan loans, eligibility requirements, and borrowing limits to determine whether taking a TSP loan is right for you. Follow below steps:
- TSP loan types and requirements.
- Loan eligibility.
- Borrowing limits.
Types of Loans:
There are two types of loans general purpose loans and primary residence loans.
General purpose loan: General purpose loan be used for any purpose and requires no documentation. Has a repayment term of 12 to 60 months and processing fee is $50.
Primary residence loan: Primary residence loan only be used for future purchase or construction of a primary residence and only for costs still needed to close and requires documentation. Has a repayment term of 61 to 180 months and processing fee is $100.
Thrift Savings Plan Loan Eligibility
You have invested at least $1,000 in the TSP’s mutual fund window, in addition to your own contributions and any associated earnings. Borrowing is not permitted for agency/service contributions and their earnings. You must first transfer the money you invested in the mutual fund window into a core TSP fund before you can borrow it.)
You are currently employed as a civilian employee of the federal government or a member of the armed forces. Participants who have separated or retired, as well as beneficiaries, are ineligible for new loans.) You have been paid. Your salary is deducted from your loan payments. Keep in mind that even if you have stopped contributing your own money, you can still borrow money from your TSP account. You have not completely paid off any TSP loan in the last 30 business days. For Sucessfull login visit TSP Login.
Read also: Move money into the TSP