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Reply to "Should I take out a HELOC or a TSP loan to finance my $40,000 bathroom renovation?"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Two options for financing my bathroom renovation, which will cost $40,000. Background: I am in my late 50's about five years away from retirement, and a long-time Fed. My current TSP balance is $1.2 million. Option #1 - A TSP loan, where I take out $40,000, and pay it back over five years. The interest rates on that loan is 4.5%, but I pay that interest to myself over the course of the loan. So essentially, I forego whatever that $50,000 will earn in my TSP account for a 4.5% return. Option #2 - A HELOC with a 9% interest rate. I could pay that back on a ten-year schedule, to reduce my payments a bit, but still....9% interest. This seems like a no-brainer to me to take out the TSP loan, right?[/quote] Why does a bathroom reno need to cost $40K? Is it cathedral sized? [/quote] It is two small bathrooms.[/quote]
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