Q. Regarding my TSP loan, I have a balance due of approximately $9,500 with a payoff date in just over two years paying $175 every two weeks. I also contribute 5 percent to my Thrift Savings Plan, which is approximately $160 per pay period. I would love to pay off my TSP loan sooner so that I could then concentrate on paying off other debt that I have (two years left on auto loan; balance of $12,000 at 2 percent). I can’t afford for my net pay to decrease anymore right now, so I am wondering if it would make sense to reduce or cancel my TSP contributions temporarily and then put that amount toward the TSP loan, which should enable me to pay it off in just over one year?
A. That’s one option, but given the attractive terms for your auto loan, you’ll probably be better off continuing to fund your TSP contributions and paying off the auto and TSP loans on schedule.
