? about loan payments switching from civilian to TSP-U account.

[elovell]

I currently have a TSP loan through my civilian account; however, I will hopefully be switching to a TSP-U account shortly. Will the loan be transferred allowing me to continue making payments or will I have to pay off the balance to keep it from being counted as a distribution?

 

[poolman]

I currently have a TSP loan through my civilian account; however, I will hopefully be switching to a TSP-U account shortly. Will the loan be transferred allowing me to continue making payments or will I have to pay off the balance to keep it from being counted as a distribution?

Hello elovell Welcome and Good Luck !

Sorry I do not know the answer to your question but I'm sure someone does and they will chime in before you know it.

I noticed that you are new and I want to wish you good luck and much success.

If you have not been lurking, reading, and learning may I suggest that you do allot of reading for that will give you a good understanding of how things work.

Knowledge is power with anything but with you having a personal interest in this subject it will be quite interesting and beneficial..

We are all here to help with each others financial well being.

Good Luck !

 

[Frixxxx]

I currently have a TSP loan through my civilian account; however, I will hopefully be switching to a TSP-U account shortly. Will the loan be transferred allowing me to continue making payments or will I have to pay off the balance to keep it from being counted as a distribution?

There are special rules for going from Civilian to Military status. If you are going part time, you can suspend your loan for a year. If you are going permanent, you have to contact TSP to determine your options because of tax rules and distribution concerns.

Contact TSP for the best answer and forms.

From TSP documentation:

A special rule applies if you enter nonpay status to perform military
service. In that case, you will be permitted to suspend payments on
your loan until you return to pay status, even if this is longer than one
year. (You cannot repay your civilian TSP loan by making loan deductions
from your uniformed services pay.) If the nonpay documentation
submitted to the TSP does not specify that you are in nonpay status to
perform military service, the suspension of your loan payments cannot
exceed the one-year period described above. (See the Fact Sheet “Effect
of Nonpay Status on TSP Participation,” available from the TSP website​

or from your agency or service.)

Good Luck and thanks for your service!