Loan repayment and TSP withdrawal


Q. I have a loan of $6,000 on my Thrift Savings Plan with 20 payments left. I am 60. If I make an age-based in-service complete withdrawal of my TSP, what happens to my loan and the payments I am making? Do I have to keep making the payments and then wait until I separate from service to receive it, or will it become a taxable disbursement and end my payments?

A. Your loan repayment obligation continues until the loan is repaid or you fail to make the required payments and the balance due is declared a taxable distribution.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

1 Comment

  1. The answer provided was true, but not as clear as it should have been.
    It you mean to close your TSP account, the money you owe would be deducted from what you would get. In other words, the loan would be paid in full with you TSP money, then you would get the rest, less taxes.

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