Can you refinance TSP loan?
A TSP residential loan may not be obtained to refinance or prepay an existing mortgage, renovations or repairs, for buying out a partner’s share in a current residence, or for the purchase of land only.
What happens to my TSP loan if I quit?
Leaving federal service
If you do not repay your loan in full, a taxable distribution of the outstanding balance of your loan will be declared. If that happens, you may be able to roll the amount of the distribution into an IRA or eligible employer plan within 60 days to avoid taxes and penalties.
Can I pay my TSP loan off early?
The IRS treats the amount of the declared taxable distribution as taxable income . In addition, if you are under age 59 ½, you may have to pay a 10% early withdrawal penalty tax . Once a taxable distribution has been declared, the loan is closed and you will not be allowed to repay it .
Can I take out a second TSP loan?
You can have two loans outstanding at any one time, but only one of each. There is a $50 processing fee per loan, which is deducted from the loan amount. When you take a TSP loan, you are borrowing from yourself.
Does borrowing from TSP affect credit score?
When borrowing from the TSP, you are borrowing your own money, there is only a $50 fee, it doesn’t impact your credit score, and you only pay interest equivalent to the G Fund’s returns (and you are repaying that interest to yourself).
Can I use my TSP to pay off my mortgage?
What Not to Do. Generally, it’s not a good idea to withdraw from a TSP or an IRA to pay off a mortgage. If you withdraw before you turn 59½, you may incur taxes and early-payment penalties.
Should I pay off my house with my TSP?
With interest rates at record lows, refinancing might make sense or you could accelerate the payoff of your mortgage by making extra payments. If, ultimately, you do still decide to use your TSP balance to pay off your mortgage, make sure you’re aware of the cost of doing so.
What is the maximum you can borrow from TSP?
$50,000
To borrow from your TSP account, you must be a Federal employee in pay status. If you qualify for a TSP loan, the maximum amount you may be eligible to borrow is $50,000; the minimum amount is $1,000. To find out the amount you have available to borrow, visit TSP Loans in the My Account section.
Do I have to report a TSP loan on my taxes?
No, everything that needs to be reported concerning a TSP (Thrift Savings Plan) account is reported on your W2. The loan re-payment does not involve deductible interest since you did not list your primary home as collateral.
What is the interest rate on a TSP loan?
TSP loans have fixed and currently very low interest rates: 0.875% at the time of publication. The rate in effect at the time the loan was made remains in effect for the life of it. To understand how monthly payments will work based on your loan, you can use the TSP.gov loan payment calculator.
Can I pay off my TSP loan online?
No, you cannot make loan payments online. When we pay out your loan, we will notify your payroll office immediately to begin deducting loan payments from your salary each pay period.