TSP Loan Rate

[Frixxxx]

Looks like we are up to 3.0%.

Don't know when they raised it.

Just thought the G Funders would like to know!

 

[Davehop21]

I believe it was 3.25 until recently like 3 weeks ago it dropped to 3.

Dave at VA

 

[Frixxxx]

Last time I looked it was 2.75...so wow....from there to 3.5 back to 3.0

Good reason not to be sitting in "G".

 

[Frixxxx]

Loan interest rate for new loans is 3.125%. as of Nov 2nd

 

[Frixxxx]

TSP Loan Interest Rate is currently: 2.875%.

For those who desperately need the money.

G Funders are not happy!

 

[Frixxxx]

TSP Loan Interest Rate is currently: 3.500%. :blink:

For those who desperately need the money.

What a Jump!

G Funders are kinda happy!:suspicious:

 

[JTH]

TSP Loan Interest Rate is currently: 3.500%. :blink:

For those who desperately need the money.

What a Jump!

G Funders are kinda happy!:suspicious:

Thanks for the heads up, that's a substancial increase.

 

[Frixxxx]

Whatever they charge is the current return on the G Fund.

I like to let the people know!

 

[Frixxxx]

The current interest rate is 3.125%.

Not too bad of a decline this month...:suspicious:

For those who desperately need the money.

G Funders are not happy!

 

[Scrappy]

The current interest rate is 3.125%.

Not too bad of a decline this month...:suspicious:

For those who desperately need the money.

G Funders are not happy!

Frixxxx,

when a persons payment is made to their TSP account for a loan, doesn't the interest go back into the account as well?

If so:

I can understand someone wanting the rate to be lower to make the payment lower but on the other hand, why wouldn't a person want more $/shares going into the account?

 

[Boghie]

Frixxxx,

when a persons payment is made to their TSP account for a loan, doesn't the interest go back into the account as well?

If so:

I can understand someone wanting the rate to be lower to make the payment lower but on the other hand, why wouldn't a person want more $/shares going into the account?

For those 'invested' in the 'G Fund' an annual rate of return of 3.125% doesn't put food on the table - now or in the future...

That is why such a low rate is not good.

For those that borrowed from their TSP account the most negative factor is not the interest payment (at least not right now) but the fact that they have to 'invest' in the 'G Fund'. Additionally, they do NOT gain the interest from the 'G Fund' they pay the interest (to themselves). So, they gain nothing.

 

[Scrappy]

For those that borrowed from their TSP account the most negative factor is not the interest payment (at least not right now) but the fact that they have to 'invest' in the 'G Fund'. Additionally, they do NOT gain the interest from the 'G Fund' they pay the interest (to themselves). So, they gain nothing.

PLEASE clarify:

What do you mean by "have to" invest in the G fund?
And what do you mean "they do NOT gain the interest from the 'G Fund'"
When you say they gain nothing does that mean the payment amount and shares purchased when a payment is made is the same no matter what the TSP loan rate is?

 

[Frixxxx]

PLEASE clarify:

What do you mean by "have to" invest in the G fund?
And what do you mean "they do NOT gain the interest from the 'G Fund'"
When you say they gain nothing does that mean the payment amount and shares purchased when a payment is made is the same no matter what the TSP loan rate is?

I know not of what Boghie speaks of, according to the booklet, if you take a loan from TSP:
When you borrow from your TSP account, your account balance is [FONT=FSDRBD+Novarese-BoldItalic,Novarese][FONT=FSDRBD+Novarese-BoldItalic,Novarese]decreased [/FONT][/FONT]by the amount of your loan. [FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]If your loan account is invested in more than one fund, your loan is deducted on a proportional basis from the employee contributions (and earnings on those contributions) that you have in each fund. [/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]When you pay back your loan:[/FONT][/FONT]
When you repay your loan, your payments are invested in your TSP account according to your most recent contribution allocation.
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese][/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]Page 6 of the booklet.[/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese][/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]The reason I post the interest rate is to show people thinking about a loan what the interest rate will be if they locked in at that time.[/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese][/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]Hopefully this helps!
[/FONT][/FONT]

 

[Scrappy]

I know not of what Boghie speaks of, according to the booklet, if you take a loan from TSP:
When you borrow from your TSP account, your account balance is [FONT=FSDRBD+Novarese-BoldItalic,Novarese][FONT=FSDRBD+Novarese-BoldItalic,Novarese]decreased [/FONT][/FONT]by the amount of your loan. [FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]If your loan account is invested in more than one fund, your loan is deducted on a proportional basis from the employee contributions (and earnings on those contributions) that you have in each fund. [/FONT][/FONT]
[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]When you pay back your loan:[/FONT][/FONT]
When you repay your loan, your payments are invested in your TSP account according to your most recent contribution allocation.

[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]Page 6 of the booklet.[/FONT][/FONT]

[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]The reason I post the interest rate is to show people thinking about a loan what the interest rate will be if they locked in at that time.[/FONT][/FONT]

[FONT=HMDZIZ+Novarese-Book,Novarese][FONT=HMDZIZ+Novarese-Book,Novarese]Hopefully this helps![/FONT]
[/FONT]

Thank you sir! that helps a lot.

My main question remains though. Why would a person want the rate to be low?

Wouldn't a higher rate equate to a greater return to the account?

I would think for some people, the higher the TSP loan rate the better?

 

[Frixxxx]

Thank you sir! that helps a lot.

My main question remains though. Why would a person want the rate to be low?

Wouldn't a higher rate equate to a greater return to the account?

I would think for some people, the higher the TSP loan rate the better?

Good Question-

Remember a loan is paid back with AFTER tax dollars. So your interest rate is also AFTER tax dollars. The higher the rate, the more YOU have to pay back!

Anyone else see it different?

 

[WorkFE]

The bigger issue IMO is the difference between what you can loan money to yourself for and what the bank will loan it to you for.
If the TSP interest rate is 3.2 and the bank is 4.2 is it worth taking ?$ out of the investment stream vs. paying the bank the money. When bank interest rates are high it is a no brainer. A little more brain work when they are low or you are able to obtain a low rate.

 

[Frixxxx]

The bigger issue IMO is the difference between what you can loan money to yourself for and what the bank will loan it to you for.
If the TSP interest rate is 3.2 and the bank is 4.2 is it worth taking ?$ out of the investment stream vs. paying the bank the money. When bank interest rates are high it is a no brainer. A little more brain work when they are low or you are able to obtain a low rate.

There is a calcualtor out here that shows how to determine which is more viable.....credit cards vs TSP loan....And I can't find it anywhere.....

Help me Obiwan Kenobe....your my only hope!

 

[Frixxxx]

There is a calcualtor out here that shows how to determine which is more viable.....credit cards vs TSP loan....And I can't find it anywhere.....

Help me Obiwan Kenobe....your my only hope!

Remembered...Corepuncher's Signature has the spreadsheet!:nuts:
Woohoo post 2222!!!!

 

[Frixxxx]

Interest Rate: The current interest rate for new loans is 3.375%, which is the current G Fund interest rate.

:nuts:G Funders----REJOICE!!!!!!:nuts:​

 

[SkyPilot]

I took out the max loan for 5 years to pay off my Parent Plus loans for my kids college. While I would have made a 60% + gain if I had left the money in the S fund, I just considered it a portfolio diversifiacation ( aobut 25% in the equivelent to the G fund). I killed the 8.5% loans and am paying my TSP account back as 3.25%, so I figure that I enjoying a spread of about 12%. That's not a bad return anytime.

So, it just depends on what your circumstances are. I would be enjoying even a better situation if the market would just tank and my TSP account could lose 50% again. Then my decision to pull money out to pay loans would seem like sheer genius and I would have shielded that 50k from huge losses! :nuts::nuts::nuts: