The last day an eligible participant can apply for a 403(b) plan loan under the current loan program is May 31. The interest rates applied to loan applications validated online at UC HR/Benefits At Your Service from May 1, 2005 thru May 31 are: 3.95% for long-term plan loans and 4.05% for short-term plan loans.
Loans initiated in May will be funded for the final time by the University Loan Office on June 23, 2005.
All future loans will be processed by FITSCO rather than UC beginning approximately mid-July 2005. This means that loan requests will not be processed from June 1 to approximately mid-July.
The time frame for processing loans by FITSCO will be much faster. For example, a loan approved on July 18, 2005 should be funded by July 22, 2005.
The interest rate for all loans, general purpose/short-term loans and primary residence/long-term loans, initiated by FITSCO will be the bank prime rate plus 1% as published in the Wall Street Journal on the first business day of each month. For example, the current prime rate is 5.75% which means the plan loan rate, if effective today, would be 6.75%.
Beginning in July, a participant with account balances at Fidelity and/or Calvert will no longer have to transfer those balances to the UC Funds in order to take a plan loan against those funds.
Additionally, there will be other new features concerning plan loans; these new features will be discussed in greater detail in future communications.Benefits Office (x6403).
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