TSP Loan Rate 3.375

**squalebear** · 04-05-2008, 06:30 AM

Originally Posted by savingpvtbryan

I've got $7000 worth of credit card debt with an interest rate of around 10%. I was thinking about taking $7k out of my TSP so I could pay off my credit card debt. Do you guys think this is a bad idea? 100% of my TSP is in C funds.

Getting out from under Credit Card Debt is essential, however, to utilize
your TSP for loan purposes has always been looked down on. IMO, the
Market should dictate the move. If it's in an uptrend, not a good time.
If it's in a downtrend, you might come out slightly better by getting a
3.375% self payment, then accepting large loses.

The bottom line: I personally wouldn't do it, especially now. If your
situation demands it, then you have no choice. Try to shorten the
amount of time (as best you can) to pay it back. Otherwise, hands off !

**Show-me** · 04-05-2008, 01:40 PM

Originally Posted by savingpvtbryan

I've got $7000 worth of credit card debt with an interest rate of around 10%. I was thinking about taking $7k out of my TSP so I could pay off my credit card debt. Do you guys think this is a bad idea? 100% of my TSP is in C funds.

Welcome to the club.

NO! Never use your retirement to pay down your credit card debit. I would only use it to fund another retirement vehicle and use the shortest time line possible to pay it back. I used mine to fund my Roth. Always keep that money working toward your retirement.

Instead cut back your contributions to 5% and send a payment to the credit card company every week or every payday. Point is to force yourself to pay down the credit card as quick as possible.

**Gilligan** · 04-05-2008, 04:22 PM

Originally Posted by EW_ret

That's news to me. Can the FERS members verify the Government does not match your normal TSP contributions while you have a loan outstanding? Why would they stop?

The Government still matches up to 5% even if you have a loan out. I have had 3 loans in the past, all for real estate, and the Government contributions continue.

**Dan** · 05-12-2008, 01:41 AM

well the loan rate is up in the 3.7 territory now

**Silverbird** · 05-12-2008, 05:39 PM

Originally Posted by Gilligan

The Government still matches up to 5% even if you have a loan out. I have had 3 loans in the past, all for real estate, and the Government contributions continue.

Yes, you still get matching, I'm getting it and I'm still paying back a real estate loan. Most private sector 401(k)s stop matching during a loan payback but under TSP you still get the 5%.