What services does TSP Loan offer?


Quick Answer

A Thrift Savings Plan loan allows any federal employee with money in the Federal Employees' Retirement System to borrow from his plan. If the employee meets all of the requirements for the TSP loan, he can borrow money for any general purpose or for the purpose of constructing or buying a primary residence. The amount of the loan cannot be more than the total amount contributed by the employee and must be repaid with interest, according to Thrift Savings Plan.

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Full Answer

To be eligible for a general purpose TSP loan, a federal employee or member of the armed services must be paid currently by the federal government, as the repayments for the loan are taken out of the paycheck each pay period. The amount borrowed must come from the employee's contributions and earnings to the Thrift Savings Plan because government contributions cannot be borrowed. The amount of employee contributions must total at least $1,000 for the employee to be eligible for a TSP loan. The employee can only have one outstanding general purpose loan and one outstanding residential loan at a time and cannot apply for a new TSP loan until an old one has been repaid in full for at least 60 days. The residential loan has the same requirements as the general purpose loan, but the employee must prove that he is using the money for the construction or purchase of a new house, boat, mobile home or RV, explains Thrift Savings Plan.

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