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New Options for TSP Loans Available for Participants Affected by COVID-19

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act became law on March 27, 2020. It allowed the Federal Retirement Thrift Investment Board (FRTIB) to create special loan rules for Thrift Savings Plan (TSP) participants affected by COVID-19.

TSP participants affected by COVID-19 (as defined by the CARES Act) may now apply for a TSP general purpose loan with an increased maximum loan amount. These participants may also temporarily suspend payments on TSP loans they currently have and on loans taken between now and November 30, 2020.

The deadline for applying for a loan with an increased maximum is September 18, 2020. The deadline for requesting suspension of loan payments is November 30, 2020. Loan payment suspensions will last for the rest of calendar year 2020.

The TSP provided the following details on the new loan options:

TSP Loans: Definitions and Eligibility

To be eligible for the CARES Act loan options, you must be a qualified individual. You’re a qualified individual if you meet at least one of the following criteria listed in the CARES Act:

  • You have been diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention.
  • Your spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) has been diagnosed with such virus or disease by such a test.
  • You are experiencing adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).

Increased maximum loan amount

The maximum loan amount is increased from $50,000 to $100,000, and the portion of your available balance you can borrow is raised from 50% to 100%. To apply, log in to My Account and use the online tool.

The deadline for applying is September 18, 2020.

Temporary suspension of loan payments

You may suspend your obligation to make payments on your TSP loan or loans for the rest of calendar year 2020. This applies to existing loans and loans taken between now and November 30, 2020.

To apply, complete and submit Form TSP-46, CARES Act Loan Suspension Request.

Carefully read all of the instructions on the form before submitting.

Using both options for TSP loans

If you are thinking of getting another loan in 2020 – in addition to placing your current loan on suspension – request the loan first so that the suspension can be applied to both loans.

Don’t hesitate to contact us today via email or call 856-914-1449 with any questions or concerns you have about your retirement planning, retirement income, and tax planning options.


RJG Financial & CPA Services focuses on providing education and information to help you understand income and CPA guided tax planning as you prepare for retirement.

Click here to schedule a no-obligation 15-minute appointment.

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