Borrowing from your TSP
How a TSP loan payment is calculated
A TSP loan is repaid in equal payments of principal and interest taken from each paycheck, so the payment depends on four things: the amount, the interest rate, the term and how often you are paid. The interest rate is the G Fund rate for the month before you request the loan, and it stays the same for the life of the loan. Under the TSP regulations it is the monthly G Fund rate in effect on the 15th of the month before your request. On September 27, 2026 tsp.gov listed 4.875% for new loans.
The TSP's former online loan estimator used the standard amortization formula: the payment equals the loan amount times the rate per pay period, divided by one minus (1 + rate per pay period) raised to the power of minus the number of payments. The number of payments is the term in months times your paydays per year divided by 12: 26 for biweekly pay, 52 weekly, 24 twice a month and 12 monthly. The calculator uses the same method. In the default example, $10,000 over 60 months at 4.875% with biweekly pay comes to 130 payments of $86.75, and you pay back $1,277.54 of interest. Paid monthly instead, the same loan takes 60 payments of $188.14. A biweekly schedule occasionally has 27 paydays in a year, and your loan agreement shows the exact payment.
| Loan amount | 12 months | 36 months | 60 months | 120 months | 180 months |
|---|---|---|---|---|---|
| $5,000 | $197.21 | $68.96 | $43.38 | $24.32 | $18.09 |
| $10,000 | $394.43 | $137.93 | $86.75 | $48.63 | $36.17 |
| $20,000 | $788.85 | $275.86 | $173.50 | $97.26 | $72.34 |
| $30,000 | $1,183.28 | $413.79 | $260.25 | $145.89 | $108.51 |
| $50,000 | $1,972.13 | $689.64 | $433.75 | $243.15 | $180.86 |
Payment every two weeks at 4.875%, our calculation with the TSP estimator formula. Terms of 12 to 60 months are for general purpose loans; 120 and 180 months need a primary residence loan.
Loan types, terms and fees
| Loan type | Use | Term | Fee |
|---|---|---|---|
| General purpose | Any purpose, no documentation | 12 to 60 months | $50 |
| Primary residence | Buying or building your main home, with documentation | 61 to 180 months | $100 |
Source: tsp.gov, TSP Loans; 5 CFR 1655.5.
The fee comes out of the loan itself. If you borrow $5,000 on a general purpose loan, the TSP deducts the $50 fee and pays you $4,950, while you repay the full $5,000. A primary residence loan can only pay costs still needed to buy or build a home, so it cannot refinance a mortgage or pay for repairs. You can have two loans at a time from an account, and only one of them can be a primary residence loan. After you repay a loan in full you must wait 30 business days before taking another one, and if you are a FERS participant or a member of the uniformed services, your spouse must consent to the loan.
How much you can borrow
The minimum loan is $1,000 and you need at least $1,000 of your own contributions and earnings in the account. Only your own money counts: agency or service contributions and their earnings cannot be borrowed, and money in the mutual fund window is left out. The maximum is the smallest of three tests. Test 1 is your own contributions and earnings, not counting any loan you still owe. Test 2 is half of your own contributions and earnings including any loan balance, or $10,000 if that is more, minus the loan balance you owe now. Test 3 is $50,000 minus your highest loan balance in the last 12 months.
With $60,000 of your own money and no loans, the tests give $60,000, $30,000 and $50,000, so you can borrow up to $30,000. With $40,000 of your own money and an $8,000 loan still open, test 2 gives half of $48,000, minus $8,000, or $16,000. The third test catches recent loans: the TSP's own example is a $35,000 loan repaid within the last 12 months, which still limits a new loan to $15,000. If you have both a civilian and a uniformed services account, the balances and loans of both count for tests 2 and 3.
What a loan costs your account
The interest is paid back into your own account, and your payments are invested according to your current contribution allocation. The real cost is growth you give up. The borrowed money comes out of your investments, so if your funds earn more than the loan rate while it is out, your account ends up smaller than it would have been. If you cut your contributions below 5% to afford the payments, FERS and Blended Retirement System members also lose part of the agency or service match. A primary residence loan is not a mortgage, so its interest is not tax deductible. The processing fee is gone for good.
Repaying early, leaving service and taxes
Payments come out of your pay through payroll deduction, the first one within 60 days of the loan date, and interest runs from the day the loan is issued. You can make extra payments or pay the loan off at any time without a prepayment penalty. If you leave federal service, you can keep the loan by paying monthly by check, money order or direct debit, pay it off, or let it be foreclosed. A foreclosed or taxed loan counts as taxable income, and if you are under 59 and a half you may also owe a 10% early withdrawal penalty tax. A loan also becomes taxable if it is not repaid by the 60-month or 180-month limit. For the rest of your federal pay, see the TSP contribution paycheck guide, the GS pay calculator, the FERS retirement calculator and the FERS paycheck deductions guide. Borrowing from a private employer plan instead? Use the 401(k) loan calculator; members of the uniformed services can pair this page with the military pay calculator.
Questions
TSP loan calculator FAQ
What is the TSP loan interest rate right now?
It is the G Fund rate for the month before you request the loan, fixed for the life of the loan. On September 27, 2026 tsp.gov listed 4.875% for new loans; check tsp.gov for the current month.
How is a TSP loan payment calculated?
With standard amortization: the loan amount times the rate per pay period, divided by one minus (1 + rate per pay period) to the power of minus the number of payments. A $10,000 loan over 60 months at 4.875% is about $86.75 every two weeks.
How much can I borrow from my TSP?
From $1,000 up to the smallest of three limits: your own contributions and earnings, half of them (or $10,000 if more) minus any loan you owe, and $50,000 minus your highest loan balance in the last 12 months.
What is the fee for a TSP loan?
The TSP deducts a $50 processing fee for a general purpose loan and $100 for a primary residence loan from the amount it pays you.
Can I pay off a TSP loan early?
Yes. You can make extra payments or repay the whole loan at any time without a prepayment penalty.
What happens to my TSP loan if I leave federal service?
You can keep paying monthly by check, money order or direct debit, pay it off, or let it be foreclosed. A foreclosed loan becomes taxable income and may carry a 10% early withdrawal penalty tax if you are under 59 and a half.
- Sources: Thrift Savings Plan, TSP Loans · TSP booklet Loans (TSPBK04) · 5 CFR 1655.5, 1655.6, 1655.7 and 1655.14 · TSP loan estimator (tsp.gov, archived February 2022).
- 🔄 Last updated September 27, 2026
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