Thread: TSP Loan Rate

Originally Posted by fabijo

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.

They round the payment amount.

It is an estimator Your calculations are correct, but if you change the dollar amount to 9993 - 10123 the payment is $83.00

You can't get an odd number (83.35) on the estimator!

Originally Posted by Frixxxx

They round the payment amount.

It is an estimator Your calculations are correct, but if you change the dollar amount to 9993 - 10123 the payment is $83.00

You can't get an odd number (83.35) on the estimator!

I like my explanation better.

Originally Posted by Viva La Migra

I like my explanation better.

You'd be sounding like he who will not be named

Originally Posted by Frixxxx

They round the payment amount.

It is an estimator Your calculations are correct, but if you change the dollar amount to 9993 - 10123 the payment is $83.00

You can't get an odd number (83.35) on the estimator!

They do this beyond just in the estimator. I've got a home loan I took out a couple years ago and their math did the same funny magic. I also just went and tried to see what would happen if I logged in and applied for a loan to see if the numbers would be right. They still came out with payments similar to the "estimator."

Maybe they use tables instead of a formula, similar to tax tables. Now that's something I can see happening.

Originally Posted by Frixxxx

You'd be sounding like he who will not be named

LOL @@@hnold?

Fabijo:

When you take out a TSP loan, you are also charged a $50 fee for doing the loan.

Add $50 to the amount you are financing, and see if that covers the difference.
(p.s.- and you aren't going to get exactly 26 pay periods every year. Some years have an extra one. )

Originally Posted by fabijo

They do this beyond just in the estimator. I've got a home loan I took out a couple years ago and their math did the same funny magic. I also just went and tried to see what would happen if I logged in and applied for a loan to see if the numbers would be right. They still came out with payments similar to the "estimator."

Maybe they use tables instead of a formula, similar to tax tables. Now that's something I can see happening.

did you take into account that the interest rate has changed?
today it's 2.5%, when we got our loan in 2006 it was 4% I believe.
-actually 3.5% I checked

Originally Posted by James48843

Fabijo:

When you take out a TSP loan, you are also charged a $50 fee for doing the loan.

Add $50 to the amount you are financing, and see if that covers the difference.
(p.s.- and you aren't going to get exactly 26 pay periods every year. Some years have an extra one. )

If you take out $10,000 the $50 comes out of that, so the amount financed is still $10,000.

Originally Posted by Viva La Migra

FRTIB skimming off the top maybe?

Now THERE you go. That must be it.

Originally Posted by crws

did you take into account that the interest rate has changed?
today it's 2.5%, when we got our loan in 2006 it was 4% I believe.
-actually 3.5% I checked

Yes, I saw that. So for $10,000 at 2.5% on TSP site, it says $82.06 for 130 payments with total interest @ $666.67.

Putting those numbers into standard loan payment formulas, you get $81.87 for 130 payments with interest @ $643.10

....

When I got my loan out in 2008, the rate was 3.375% and they also gave me a different number than what is calculated using standard formulas.

I'm really leaning toward them using some form of payment tables.

Originally Posted by crws

LOL @@@hnold?

Someone from the board who no longer plays here! But nice guess!