Interest Rate: The current interest rate for new loans is 3.250%, which is the current G Fund interest rate.
Don't know when it "officially" changed.....
I think TSP'ers need to be notified of the change somehow automatically!
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
Interest Rate: The current interest rate for new loans is 3.250%, which is the current G Fund interest rate.
No change as of 1 Jun!
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
Interest Rate: The current interest rate for new loans is 2.875%, which is the current G Fund interest rate.
But Jun 3rd has a change!
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
Wow Frixxxx, that is quite a drop in rate! People in Europe panicking or something?
"life can only be understood backwards, but it must be lived forwards" - soren kierkegaard
Interest Rate: The current interest rate for new loans is 2.625%, which is the current G Fund interest rate.
Anyone need a loan or re-amortize?
Wow!
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
I have no idea if anyone will really see this post buried in the G Fund thread, but here goes...
Every once in a while, I check out the TSP Loan rate out of curiosity. I've used it in formulas to compare investments/loans in Excel. But a couple times, I've used the TSP Loan calculator on the TSP site to see how much the biweekly payments are. Every time, the payment they show is different than the payment I calculate in Excel. I can get it dead on when I use Excel to calculate mortgage payments, but it never goes right with the TSP Loan. I've searched and searched and I just can't quite figure out how it works.
Here's an example:
Currently, the TSP calculator (here) says the rate is 2.625%. I plug in $10,000, 5 years payed off biweekly (26 times a year).
It comes up with 130 payments at $83.00 each, with a total in payments equaling $10,790 - an interest payment of $790 by the end.
now in Excel...
I must be doing something wrong in my formulas, but the only way to get the payment and total interest to match is to use a rate of 3.0586%
I use the PMT formula in excel. The syntax of PMT is:
PMT(rate, number of periods, present value, [future value], [type])
future value and type are optional. I usually leave them out, but I've tried using them to no avail.
For rate, I use the quoted rate divided by 26 (.02625/26)
For the number of periods, I use 26 * years. In this case, it's 26 *5 = 130 payments. That matches up with TSP calculator.
Present Value is $10,000 in this case.
If I plug those numbers in, I get 130 payments of $82.12, with a total of payments equaling $10,675.60. That's $114.40 less than what the TSP site calculates. The only way I can make it equal is to plug in a percentage of 3.0586%
I've tried online loan calculators and it is the same thing. I'm guessing the TSP must be doing some strange rate calculations, but I just can't figure it out. Has anyone else noticed this or do you see where I'm going wrong???
I have been using this "what's missing" calculator for years (http://www.hughchou.org/calc/missing.cgi) and get what you get.
By the way, I moved this thread out of the G-fund forum and into a new sub-forum called "TSP Loans" under the TSP News forum.
Tom
Market Commentary | My Blog | TSP Talk Plus | |
I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.
Thanks, Tom. I wonder what strange accounting method the TSP is using then. Maybe I'll have to call them to find out what they are doing.
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