Again, TIAA-CREF imposes no charges or penalties on the loan. However, if repayments are not made as scheduled, we are required to report the defaulted amount to the IRS as a taxable distribution. At least 110 percent of the loan must be kept as collateral in the Retirement Loan Certificate. Repayment is due within five years, or within ten years if the loan is used to purchase a principal residence. Interest is at a variable rate tied to the monthly average corporate yield, published by Moody's Investors Service.
Interest remains the same for the first year.