Loan Interest Rate to Drop


The fixed interest rate on loans issued by NYSTRS to eligible Tier 3-6 members will decline by 0.5% effective July 1. The reduction corresponds with the Retirement Board’s decision to lower the assumed rate of return on investments from 8.0% to 7.5%.

The new rate will be 6.5%, down from 7.0%. (The rate for Tier 1-2 members is set in statute and will remain 5.0%.) Additionally, a life insurance premium of 0.10% is charged annually, guaranteeing the loan is fully insured after 30 days. (This guarantee is forfeited should the loan go into default.)

Please Note: Prior to June 28, the Loan Calculator in MyNYSTRS will calculate loan payments based on the rate currently in effect (i.e., the higher rate). Loans calculated on or after June 28 will use the rate effective July 1 (i.e., the lower rate).

A loan application received on or before June 27 will be subject to the higher rate of interest for the length of the loan. Applications received on June 28 will be processed and dated July 1, meaning the lower interest rate will be applied. See this illustration to understand the difference in the expected monthly payment using the old and new interest rate.

For more information on loans from NYSTRS, see the publication Borrowing From Your NYSTRS Contributions. We urge you to read this information carefully before taking a loan because you could face severe tax consequences if you borrow from NYSTRS.

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