Texa$aver Loans for Active Employees

Planning for unexpected expenses can be difficult. Before you decide to tap into your Texa$aver account, make sure you understand how a loan could impact your retirement savings. Employees who participate in the Texa$aver 401(k)/457 Program may borrow a portion of your account balance in the form of a loan once you have an account balance of at least $1,050.

You may borrow a minimum of $1,000 up to a maximum of $50,000 or 50% of your vested account balance reduced by your highest outstanding loan balance during the past 12 months. Texa$aver allows a maximum of two loans per Plan. Examples:

  • If your balance is $1,000–$10,000, you may borrow the entire balance (as long as the $50 loan application fee is covered).
  • If your balance is $10,001–$20,000, you may borrow up to $10,000.
  • If your balance is $20,001 or higher, you may borrow 50% of the balance, not to exceed $50,000.

Pros 

  • You have access to the money in your Plan account.
  • You pay yourself back with interest that may be lower than a bank interest rate.
  • There is no credit check.

Cons 

  • The amount of the interest may be less than the money you would have earned had you invested the loan balance.
  • Your loan repayments are made with after-tax dollars.
  • Many participants decrease or stop contributions while paying back a loan.
  • Taking a loan impacts your retirement nest egg.

Types of loans available

Amounts borrowed through the loan program are not taxable distributions and are not subject to federal income taxes unless you do not pay back the loan in full.

  • General Loans are available for any reason, and they must be repaid within 12 to 60 months. These loans are processed without any paperwork. Your signature on your loan check means that you accept the terms of the loan.
  • Residential Loans must be used for the purchase of your primary residence only, and they must be repaid within 61 to 180 months. You must provide certain documentation when you request a residential loan.

Loan fees

  • $50 initiation fee is deducted from loan payout.
  • $2.08 is deducted from the account for loan maintenance every month.
  • Loan fees can be found on the quarterly statement under the Expenses section. 

Interest rates

The interest rate for either a General Loan or a Residential Loan is equal to the prime rate plus 1%, as printed in the Wall Street Journal on the last business day of the prior month. The Service Members Civil Relief Act (an update to the Soldiers' and Sailors' Civil Relief Act of 1940) imposes a 6% maximum limit on the interest rate charged to military service members for loans for the duration of active military service. For more information, contact Texa$aver at (800) 634-5091.

Requesting a loan 

Be sure to review information about repaying your loan before you request a loan.

  • Log into your account on the Texa$aver website, and select your Plan. Under the My Account tab, click on "Loans," then "Request a Loan." You will be required to provide your PIN to request a loan. The Plan Loan Calculator can help you determine your repayment schedule.
  • Call the Texa$aver Information Line at (800) 634-5091 to use the automated service to request a loan or speak with a Customer Service Representative about your options.
  • Your loan application will be processed and a check will be mailed usually within two to five business days.