What Is a Thrift Savings Plan (TSP) Loan?

A Thrift Savings Plan (TSP) loan is a financial option available to federal employees and military members who participate in the TSP, a government-sponsored retirement savings program. This loan allows participants to borrow from their own TSP account balance without incurring early withdrawal penalties.

Read on to learn more about TSP loans and how they work, including what you may use a TSP loan for, eligibility requirements, how long it takes to get a TSP loan, and more.

What Is a Thrift Savings Plan?

A Thrift Savings Plan (TSP) is a type of retirement plan for federal employees and uniformed service members. It’s similar to a 401(k), where individuals contribute funds into the account throughout their working life. When they retire, they may use those funds, plus interest and earnings, to live on.

Often, contributions are automatic so that a portion of a person’s paycheck goes directly into their TSP. These contributions may be tax-deferred.

How Does a Thrift Savings Plan (TSP) Loan Work?

A TSP loan is money you borrow from your Thrift Savings Plan. The minimum amount you may borrow with a TSP loan is $1,000. The maximum amount you may borrow is the smallest of these:

• Your contributions and earnings

• 50% of your total balance or $10,000, whichever is greater

• $50,000 minus your higher outstanding TSP loan balance, if any, over the past 12 months

Recommended: How Much Can You Borrow With a Personal Loan?

What Can You Use a TSP Loan For?

There are two types of TSP loans:

• General purpose

• Primary residence

You may use a general purpose TSP loan for almost anything. It has a repayment term of 12-60 months, and there is a $50 processing fee.

A primary residence TSP loan must be used for the purchase or construction of a primary home. Borrowers must provide supporting documentation. This loan has a repayment term of 61-180 months, and there is a $100 processing fee.

You may pay interest on a TSP loan, but because it’s your own money that you’re borrowing, the interest you pay goes back to your account.

How Long Does It Take to Get a Thrift Savings Plan (TSP) Loan?

TSP loans typically take 7 to 10 business days to process after your loan request is approved. The timeline may vary depending on how you submit your application and whether your account information is up to date. Choosing direct deposit may help expedite receiving the loan funds.

Getting a Thrift Savings Plan (TSP) Loan

To get a Thrift Savings Plan loan, review the requirements and options on the TSP website. Determine how much money you want to borrow, and make sure it fits the criteria outlined above. Then, log into your TSP account and fill out the loan application. You may be able to submit your application online, or you might have to print it out and mail or fax it.

Thrift Savings Plan (TSP) Loan Eligibility Requirements

Both types of TSP loans have certain eligibility requirements. For both, you must have at least $1,000 of your own contributions and related earnings available, and you need to be employed as a federal employee or be a member of the uniformed services. In addition, you must not have repaid a similar TSP loan in the last 30 business days.

For a primary residence TSP loan, you may use the loan to buy or build one of the following:

• House

• Townhome

• Condominium

• Shares in a cooperative housing corporation

• Mobile home

You can’t use a primary residence loan to refinance or prepay an existing mortgage, renovate your existing home, buy another person’s share in your existing home, or buy land.

Should You Get a Thrift Savings Plan (TSP) Loan?

If you have a qualifying TSP and need to borrow money, a TSP loan could be beneficial. Generally, TSP loans have lower interest rates than other financing options (as of July 2026, that rate was 4.50%).

Just keep in mind that any money you borrow from your Thrift Savings Plan is money you’re taking away from your retirement. It won’t continue to earn dividends and interest like it would if it remained in your TSP account.

And even though the interest you pay on the loan goes into your account, that interest may typically be less than you would have earned if the money had remained in your TSP account. It’s important that you pay back the loan promptly so you don’t jeopardize your retirement funds. You may even want to pay off a TSP loan early.

Thrift Savings Plan (TSP) Loan Alternatives 

If you decide that a TSP loan isn’t the right option for you, there are alternatives to get the money you need, including:

Credit Card 

While credit cards often have high interest rates, you may be able to get one with an introductory 0% APR (annual percentage rate) for the first year. That way you may use the credit card to pay for whatever expense you have, and as long as you pay off the full amount before the introductory period ends, you won’t owe interest. 

Recommended: How to Find the Right Credit Card

Cash 

You could also use cash instead of a TSP loan to cover your expenses. However, you may have to wait until you save up enough funds, which could take some time. Plus, you don’t want to drain your entire savings account — you may want to keep enough money in reserve to cover any emergencies that come up.

Personal Loan

A personal loan is where a bank, online lender, or credit union lends you a lump sum that you repay with interest in installments over time. The higher your credit score, the lower the interest rate you may receive.

There are many benefits of a personal loan, including the potential to receive funds quickly — generally within one to five days. But be sure to weigh the pros and cons of personal loans before applying to make sure it’s the right option for you.

The Takeaway

You may borrow from your Thrift Savings Plan with a Thrift Savings Plan loan, but consider carefully whether this is the right option for you. Taking money out of your retirement fund may cost you in earnings and interest. There are other alternatives for borrowing money, like taking out a personal loan, that you may want to think about instead.

If you’re exploring the idea of a personal loan, Lantern by SoFi can help. By filling out one simple form, you can compare personal loan rates and terms from multiple lenders at once to conveniently find the best fit for your needs.

Check your rate today with Lantern!