The differentiator no competitor offers
Most TSP loan calculators show you the payment. This one shows you the opportunity cost — what the borrowed principal would have grown to if left in the C, S, or I Fund, versus the G Fund interest you pay back to yourself. On a $20,000 / 5-year loan at 4.500% with an 8% market return, the net gap is roughly $7,035.
How the loan math works
TSP loans use standard amortization — each payment covers accruing interest first, then reduces principal. The critical detail: the loan fee ($50 for general purpose, $100 for residential) is deducted from the disbursed proceeds, but amortization runs on the full requested principal.
Request $20,000 → receive $19,950 in cash (fee deducted)
But repay principal on the full $20,000
Biweekly payment = P × r / (1 − (1 + r)^−n)
where r = annual rate / 26 (biweekly periods) · n = years × 26
At 4.500% / 26 periods = 0.1731% per biweekly period. Over 130 periods (5 years), a $20,000 loan produces a biweekly payment of $171.93, total repaid $22,351.62, and interest to self of $2,351.62.
2026 G Fund rates — month by month
The loan rate is fixed to the G Fund rate for the month before your loan request. It stays fixed for the life of the loan regardless of subsequent G Fund changes, except that a civilian who enters active-duty military service can ask to have it cut to 6% for that service (5 CFR § 1655.7(b)).
2026 TSP G Fund monthly loan interest rates| Month | G Fund Rate |
|---|
| January 2026 | 4.250% |
| February 2026 | 4.250% |
| March 2026 | 4.000% |
| April 2026 | 4.375% |
| May 2026 | 4.500% |
| June 2026 | 4.500% |
| September 2026 | 4.875% |
Source: tspfolio.com (tsp.gov data) · Bogleheads forum corroboration. Rate set monthly by TSP.
General purpose vs residential loan
Two loan types — same interest rate formula, different fee and term limits.
Comparison of general purpose and residential TSP loans| Feature | General Purpose | Residential |
|---|
| Purpose | Any reason | Primary home purchase/construction |
| Term range | 12–60 months (1–5 years) | 61–180 months (6–15 years in this tool) |
| Loan fee | $50 (deducted from proceeds) | $100 (deducted from proceeds) |
| Documentation | None required | Required (purchase agreement / construction docs) |
Source: tsp.gov/tsp-loans/ · 5 CFR § 1655.6. Fee is non-refundable and deducted from gross proceeds.
The real cost: opportunity cost explained
When you borrow from TSP, the principal leaves your investment funds (C, S, I, F) and earns 0% market return while it's outstanding. Meanwhile you repay it — plus interest — rebuilding the balance. The question the standard loan calculator skips: what would that principal have grown to if you had left it invested?
This calculator uses Approach A (lump-sum modeling): it treats the full borrowed principal as if it had remained invested for the entire loan term. This modestly overstates the opportunity cost because in practice your repayments gradually rebuild the balance — but it is the more conservative and intuitive framing. The disclosure label in the results makes this explicit.
FedTools 2026 worked example: $20,000 general-purpose loan · 5-year term · 4.500% G Fund rate · biweekly repayment · 8% assumed return. Interest to self: $2,352. Foregone growth at 8%: $9,387. Net opportunity cost: $7,035 — roughly 3× more than the interest paid.
The interest you pay yourself partially compensates for the removed principal — you earn the G Fund rate on repayments flowing back into your account. But the net gap (the difference between what the market would have returned and what the G Fund interest returns) is the honest measure of what borrowing costs your retirement.
TSP loan rules: maximums, limits, and the two-loan rule
The maximum TSP loan is the smallest of three calculations (5 CFR § 1655.6(b)):
- The part of your balance attributable to your own contributions and their earnings (not agency money), excluding outstanding loan principal.
- The greater of 50% of your own-contributions balance including any outstanding loan balance, or $10,000, then subtract the outstanding loan balance.
- $50,000 minus your highest outstanding TSP loan balance at any point in the preceding 12 months (not just what you owe today).
The $10,000 floor in rule 2 protects employees with small balances: if your own-contributions balance is $15,000, 50% = $7,500, which falls below $10,000 — so the effective cap becomes $10,000 (minus outstanding).
Two-loan rule (effective 2022): You may have at most two loans outstanding at once from each TSP account, and only one of them may be a primary residence loan (so two general-purpose loans, or one general plus one residential). After you pay off a loan, more than 30 business days must pass before you request another (5 CFR § 1655.2(a)). This calculator models one loan at a time and does not check how many you already have.
Estimate note: The max-loan guard in this calculator uses the values you enter. Log in to your TSP account at tsp.gov for the exact personalized maximum based on TSP's live records.
What happens to your loan if you separate or retire
If you leave federal service with an outstanding TSP loan, payroll deductions stop immediately, but you do not have to repay it in full right away. You can keep the loan and continue paying it off yourself, by check, money order, or direct debit, within the loan's original term. If you stop paying, TSP forecloses the loan and declares the unpaid balance a taxable deemed distribution. You will owe ordinary income tax on it, plus a 10% early-withdrawal penalty if you are under 59½, unless you separated in or after the calendar year you turned 55. One relief valve: the Qualified Plan Loan Offset (QPLO) rule gives you until your tax filing deadline, including extensions, to roll the balance into an IRA and avoid the tax hit. See our full separation guide for the complete timeline.