TSP Features for Civilians| TSP Loan Program |
| TSP Features for Civilians |
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While you are employed by the Federal Government, the TSP loan program gives you access to the money that you have contributed to your TSP account and the earnings on that money. You must be in pay status to obtain a loan, because your regular loan payments will be made through payroll deductions. You cannot borrow any agency contributions in your account or any earnings attributable to those contributions.
See the booklet TSP Loans for more information
What types of loans are there? 
There are two types of loans — a general purpose loan and a loan for the purchase of your primary residence. You can apply for a general purpose loan with a repayment period of 1 to 5 years, or you can apply for a residential loan with a repayment period of 1 to 15 years.
How do I document my residential loan ?
No documentation is required for a general purpose loan, but you must submit documentation (such as a contract for the purchase of your residence) to support the amount you are requesting for a residential loan.
How many loans can I have at one time?
You may have one general purpose loan and one residential loan from your civilian TSP account at any one time.
What are the minimum and maximum amounts I can borrow?
The minimum loan amount is $1,000. Therefore, you must have at least $1,000 of your own contributions and attributable earnings on those contributions in your TSP account to apply for a loan. The maximum loan amount is $50,000, but the maximum amount you are eligible to borrow depends on the amount you have contributed to your account, any outstanding TSP loans, and limits set by the Internal Revenue Code.
If you have both a civilian and a uniformed services account, the maximum loan amount available for you to borrow will be based on calculations that consider the account balances and outstanding loan balances for both accounts.
To find out the amount you may be eligible to borrow from your TSP account, visit Account Access on this Web site or call the ThriftLine.
What will the interest rate be?
The interest rate you pay for the life of the loan is the latest available interest rate for the G Fund at the time your application is processed. The interest you pay on the loan will go into your TSP account, along with repayments of the loan principal. Visit Current Information on this Web site or call the ThriftLine to find out the current interest rate for TSP loans. Also, if you use the Loan Calculator on this Web site, the calculator will use the current rate automatically.
Will I have to pay a fee for the loan?
Yes. You must pay a one-time fee of $50, which covers the cost of processing and servicing the loan. The fee is deducted from the proceeds of the loan.
How does a loan affect my account?
Proceeds of the loan are removed from your TSP account and thus do not accrue earnings while outside the Plan. Although funds are restored to your account when your loan payments are posted, borrowing from your account will affect the final account balance available for your retirement.
Because each TSP investment fund has a different rate of return, the interest you pay on your loan at the G Fund rate is likely to be different from the rates of return on the other TSP funds. If you have invested in any fund(s) other than the G Fund, the earnings in your account when your loan is fully repaid are likely to be different from what your earnings would have been if you had not taken the loan.
Thus, even though you pay back your loan with interest, you may have less money in your account when you retire than you would if you had not borrowed from it.
How can I estimate my loan payments?
If you are thinking about taking a loan from your TSP account, you may want to visit the Calculators section of this Web site. The Loan Calculator can help you determine the estimated amount of your loan payments and the length of time it would take you to repay the loan. The calculator automatically uses the current loan interest rate.
Download a copy of the TSP Loans booklet from this Web site, or obtain a copy from your agency personnel office. The booklet explains the loan requirements and your obligations if you take a loan. It is important that you read the booklet before you apply for a loan.
You can initiate your loan request in one of two ways:
First, using your TSP account number and your Web password, you can apply for a loan in the Account Access section of this Web site. This is the most efficient way to request a loan. If you cannot complete the loan request on the Web, you will be instructed to fill in as much information as possible on the Loan Agreement, print it out, and mail it to the TSP with any additional required documentation and information.
You can also print the Loan Application (Form TSP-20) from the Forms & Publications section of this Web site or obtain the form from your agency. When you have completed the form, mail it to the TSP at the address on the form. You will be sent a Loan Agreement which you must complete and return (with any required documentation) by the expiration date on the Agreement.
Does my spouse have to consent to my loan?
If you are a married FERS participant, the law requires that your spouse consent to your TSP loan. If you are a married CSRS participant, the law requires the TSP to notify your spouse before your loan is disbursed. (See "Spouses’ Rights.") These requirements apply even if you are separated from your spouse.
When can I expect to receive my money?
Generally, it takes several weeks from the time the TSP receives all of your information until you (or your financial institution) receive the money for your loan. You may get your money in less time if you can complete your request on this Web site.
The TSP will mail your check to the address on file with the TSP. If your address has changed, please ask your agency to update the address for your TSP account before you apply for a loan. If your check is lost in the mail, it can take 6 weeks or longer to replace it.
You can choose to have your money deposited directly into your checking or savings account by electronic transfer of funds (EFT). For security reasons, if you would like to have your loan payment sent by EFT, you will not be able to complete your entire request on line. EFT deposits are safer, more convenient, and usually faster than checks. EFT deposits can be made only to financial institutions in the United States.
Loans must be repaid through payroll deductions over the payment period specified in your Loan Agreement. You can make additional loan payments by personal check or money order to repay your loan more quickly or to make up for missed payments. Be sure to write your loan number on your check and send it in with a Loan Payment Coupon. There is no penalty for early prepayment.
If correct loan payments are not received from your agency in accordance with the repayment schedule, you must send in a payment yourself to cover the missing amount. If you do not make up the missed payments within the time limits set by the IRS, the TSP will declare a taxable distribution in the amount of the unpaid loan principal and any unpaid interest. The distribution will be subject to income tax for the year in which it is declared. You may also be subject to the 10 percent Internal Revenue Code early withdrawal penalty tax on this distribution. Once a taxable distribution has been declared for default, you cannot repay your loan. In addition, you will not be eligible for another loan within 12 months of the date of your taxable distribution.
If your loan payments are incorrect or if they are missed for any reason (for example, error, leave without pay, transfer to another agency), you should contact your agency immediately. If you go into approved nonpay status, loan payments can be suspended for the nonpay period — but only for up to one year, due to IRS requirements. (A special rule applies to those who go into nonpay status to perform military service.) The TSP can assist you in determining the amount of money you may owe. You can also determine the amount owed using this Web site (on the Account Access menu page, click on Loans and then Outstanding Loans). You are responsible for repaying your loan.
You can also reamortize your loan. Reamortization means that your loan payments can be recalculated to increase or decrease the amount of your payments or to lengthen or shorten the term of the loan, or to change your pay cycle (i.e., biweekly to monthly). There are no limitations on how often you can reamortize the loan throughout the life of the loan.
If you leave Federal service, you must repay the loan in full, including any interest on the outstanding principal. If you are requesting a withdrawal of your TSP account, delay in repaying your loan will affect the processing of your withdrawal. If you do not repay the loan, the TSP will declare a taxable distribution for the balance of the outstanding principal and interest. The TSP will also declare a taxable distribution to your estate if you have an outstanding TSP loan when you die.
After I repay a loan, how soon can I apply for another one?
You must wait 60 days from the time your loan is paid in full until you are eligible for another loan of the same type.