Last updated: December 17, 2025. This calculator uses standard fixed-rate amortization formulas.
Use the TSP Loan Calculator to quickly determine your required monthly payment, total interest paid, or solve for any missing variable in your TSP loan repayment schedule.
TSP Loan Calculator
TSP Loan Calculator Formula
The calculation is based on the standard monthly payment amortization formula, which can be rearranged to solve for the principal, term, or rate.
Monthly Payment (M) Formula:
$$M = P \left[ \frac{r(1+r)^n}{(1+r)^n - 1} \right]$$
Where $r = R / 1200$ (Monthly Rate), and $n = T \times 12$ (Total Payments).
Formula Source: Amortization Definition
Variables
Here is an explanation of the variables used in the calculator:
- Loan Principal ($): The initial amount borrowed from your Thrift Savings Plan (TSP) account.
- Annual Interest Rate (%): The interest rate applied to the loan. Note: TSP loan interest is repaid to your own account.
- Loan Term (Years): The total duration (in years) over which you will repay the loan.
- Monthly Payment ($): The fixed amount paid each month to cover the principal and interest.
Related Calculators
Explore other financial tools to help manage your retirement and savings goals:
- Compound Interest Calculator
- Savings Goal Planner
- Future Value Calculator
- Roth IRA Contribution Calculator
What is TSP Loan Calculator?
The TSP Loan Calculator is a financial tool designed specifically for federal employees who participate in the Thrift Savings Plan (TSP) and consider taking a loan against their retirement savings. It helps model the repayment structure of a TSP loan, which operates similarly to a standard amortized loan, even though the interest payments go back into the borrower’s own TSP account.
By inputting three out of four primary variables—Loan Principal, Interest Rate, Term, or Monthly Payment—the calculator can instantly solve for the fourth, giving users critical information needed for financial planning. It’s essential for understanding the cash flow commitment (Monthly Payment) and the total cost (Total Interest Paid) over the life of the loan.
How to Calculate TSP Loan Repayment (Example)
Let’s assume you borrow $10,000 for 5 years at a 4.00% annual interest rate. Here are the steps the calculator takes to find the monthly payment:
- Determine Monthly Rate ($r$): Divide the annual rate by 1200. $r = 4.00 / 1200 = 0.0033333$.
- Determine Total Payments ($n$): Multiply the term in years by 12. $n = 5 \times 12 = 60$ months.
- Calculate the Payment Factor: Compute the complex fraction: $\frac{r(1+r)^n}{(1+r)^n – 1}$. This factor is approximately 0.0184166.
- Calculate Monthly Payment ($M$): Multiply the Principal by the Payment Factor. $M = \$10,000 \times 0.0184166 = \$184.17$.
- Calculate Total Interest: Multiply the Monthly Payment by the total number of payments, then subtract the Principal. Total Interest = $(\$184.17 \times 60) – \$10,000 = \$1,050.20$.
Frequently Asked Questions (FAQ)
Is the interest paid on a TSP loan taxed?
No. Since the interest is repaid to your own account, it is considered a transfer within your retirement plan and is not a taxable event when paid.
What happens if I leave federal service with an outstanding TSP loan?
If the loan is not fully repaid, the outstanding balance will typically be declared a taxable distribution, which may result in income tax and a 10% early withdrawal penalty if you are under age 59½.
How many variables do I need to input?
You must input at least three of the four variables (Principal, Rate, Term, or Payment) to solve for the missing fourth variable.
Can the calculator solve for the interest rate?
Yes. The calculator uses iterative methods (like the Bisection Method) to accurately solve for the unknown Annual Interest Rate (R) when all other variables are provided.