How do I apply for a loan online?
NYCERS’ online loan application enables Tier 4, Tier 6 and eligible Tier 3 MyNYCERS accountholders with a registered PIN to log in to their accounts, calculate various loan options, and then apply for a loan online. If you apply online and select Direct Deposit (Electronic Funds Transfer, or EFT), your loan will be processed in three (3) business days and your funds will be deposited directly into your savings or checking account. If you do not select Direct Deposit, the loan will be processed in ten (10) business days. Please read the section “Electronic deposit of your loan” below to find out more about Direct Deposit.
Eligibility, fees, interest rates, and repayment requirements are the same as when you apply in person or by mail, but there are a few key differences when you apply online, which are described below.
To apply for a loan online
- First, if you have not already done so, you must activate your MyNYCERS account on our website (it’s free and easy).
- Second, register the Personal Identification Number (PIN) subsequently sent to you by NYCERS. If you have activated your account but not yet received a PIN, log in and you will see links enabling you to replace a lost PIN.
- Third, check your MyNYCERS account to make sure the correct address is on file. If the address is incorrect, submit NYCERS Form #290 (Change of Address). Your new address should be reflected in your online account within 10 business days after receipt of the form. You may log in again after that and apply for a loan online.
Once your PIN has been registered and your correct address is in NYCERS’ system, you will be able to apply for a loan online.
Your eligibility status is displayed in MyNYCERS. If you are eligible, you may apply for a loan online. If you are not eligible, the status message will display the reason why (for example, you have been a NYCERS member for less than one year, or you have not accrued enough money in your NYCERS retirement account).
In some cases, even if you are currently ineligible you may be able to calculate a future loan. If you will become eligible within 30 days from the date you observed the ineligible status message, you may file a loan application, but NYCERS will hold it for processing until your eligibility date.
How it works
When you apply online, you will see a Loan Amount field that is populated with the maximum loan amount currently available to you. You can change this amount and continue to calculate loans with different loan amounts, repayment amounts, or number of payments as many times as you’d like.
If part of your loan is subject to taxes, you will be shown both taxable and tax-free loan options (see below). If you are presented with taxable options, weigh each option carefully, as tax consequences might change how you wish to proceed. In some cases your taxable amount can be greater than your new loan amount.
You can then select the loan option you would like to proceed with. From there, you will be required to confirm your address and put in your daytime phone number.
If you are applying for the maximum available loan amount, please note that because it takes approximately 10 business days to process your loan (or 3 business days if you apply online and choose EFT), the amount you receive will be the maximum loan amount available at the time your loan is processed.
If you are not applying for a loan at or near retirement and you choose a taxable loan option, you will be able to indicate if you would like NYCERS to withhold 10% tax from the taxable portion of the loan check upon applying. This amount is then credited toward your tax liability when you file your annual income tax return.
Electronic deposit of your loan check
During the online loan application process, you will be able to indicate if you would like NYCERS to either mail your check or electronically deposit it into your bank checking or savings account through Electronic Funds Transfer (EFT). If you choose EFT, you will need to enter
- the name of your bank, AND
- your account number, AND
- the 9-digit routing code of your bank
NYCERS must have a copy of a voided check or deposit slip on file in order to send your funds electronically. If you have had an Electronic Fund Transaction (EFT) in the past and the information you are entering today matches your existing EFT information in our records, we will send your funds electronically. (For security reasons, NYCERS cannot check for this match during the online loan process.) However, if this is your first direct deposit transaction, complete the online application and then send or bring your voided check or deposit slip referencing your Member Number to NYCERS immediately. (Faxes are not accepted.) If we do not have valid EFT information on file when your loan is processed, a paper check will be sent to your address on file. (EFT with your agency for payroll purposes cannot be applied to your NYCERS loan application.) The name on your bank account must also exactly match the name NYCERS has on file for you. If it does not match, a paper check will be mailed to you.
Review and submission of the online application
You will be able to review and print your loan option selections before you submit the application. After submitting the application, you will be able to print a confirmation copy for your records with all details of the transaction.
Your application will not be viewable in your MyNYCERS account after submission. If you want a copy, you must PRINT it out immediately after submission.
Once you submit your application, NYCERS will process it in approximately 10 business days (or, if you are applying in advance, within 10 days after your eligibility date). If you apply online and select EFT, your loan will be processed in three (3) business days. If you wish to revise or cancel your loan application after submitting it online, check the status of your application in the Loan Availability section of your MyNYCERS account and proceed from there. Cancellation may not be possible depending on the status of your application. If NYCERS cannot cancel your online loan application after you submit the cancellation request online, a member of the Loans Unit will contact you.
If you apply for the maximum and see that the maximum increases during the processing time, you do not need to submit a revised application. NYCERS will automatically grant the highest loan amount available at the time of processing.
Taxable and tax-free loan options
If a loan (or combination of loans) exceeds a certain dollar threshold beyond your tax-deferred contributions, it may be taxable. If a loan (or combination of loans) is not repaid within five years, it may also be taxable. If you take a loan at or near retirement, all or part of it will be considered a retirement distribution and will be considered taxable income. NYCERS will automatically withhold 20% tax from a loan taken at or near retirement. You will receive a 1099 from NYCERS for the taxable portion of a loan.
If you are not taking a loan at or near retirement and all or part of your loan is taxable, NYCERS offers you the opportunity to have 10% of the taxable portion withheld from your loan check upon applying. This amount is then credited toward your tax liability when you file your annual income tax return.
Here are explanations of the possible tax-free and taxable loan options that you will see when you apply online. The options assume you are paid biweekly. The total loan amount repaid includes interest at 6.2% (6% interest plus 0.2% mandatory loan insurance).
Tax-Free New Loan: You are applying for a loan for the first time, or you have paid off a prior loan in full. These figures show tax-free loan options and a repayment schedule not to exceed 5 years.
Tax-Free Refinancing Existing Loan: These figures show tax-free loan options when you refinance by consolidating a new loan with an existing loan. A new repayment schedule for the Total Loan Amount, not to exceed 5 years, will be implemented.
Tax-Free Loan with Original Terms: These figures show tax-free loan options when you add a new loan to an existing loan balance and repay the new Total Loan Amount within the original repayment schedule (not to exceed 5 years). If the original repayment schedule was five years, you may repay the new Total Loan Amount for the remainder of payments in the 5-year period. If you chose an original repayment schedule of less than 5 years, your new repayment schedule will be automatically adjusted as if your original repayment schedule was 5 years.
Taxable New Loan: You are applying for a loan for the first time, or you have paid off a prior loan in full, and your new loan has tax consequences. These figures show taxable loan options and a repayment schedule not to exceed 5 years.
Taxable Refinancing Existing Loan: These figures show taxable loan options when you refinance by consolidating an existing loan with a new loan. A new repayment schedule for the Total Loan Amount, not to exceed 5 years, will be implemented.
Taxable Loan with Original Terms: These figures show taxable loan options when you add a new loan to an existing loan balance and repay the new Total Loan Amount within the original repayment schedule (not to exceed 5 years). If the original repayment schedule was five years, you may repay the new Total Loan Amount for the remainder of payments in the 5-year period. If you chose an original repayment schedule of less than 5 years, your new repayment schedule will be automatically adjusted as if your original repayment schedule was 5 years.
Retirement Loan: Internal Revenue Service regulations require NYCERS to treat pension loans as a retirement distribution if they are taken at, or near, the time of retirement. These figures show the taxable and tax-free portion of a loan taken at or near retirement.
This type of loan will not be issued until after your retirement date as NYCERS completes a review of your account. It may take up to one month to complete the review and issue your loan check. After you retire, any outstanding loan will reduce your pension unless you pay off the loan in a lump sum. By repaying the loan in full after retirement, your monthly pension checks will increase prospectively, meaning that your monthly pension check will revert to what it would have been had it never been reduced by the actuarial equivalent of your outstanding loan.
You may roll over the taxable portion to an IRA or Employer Plan. In the event you choose not to roll over the taxable amount, NYCERS is required to withhold 20% Federal tax before issuing the check. If you have not yet reached the age of 55 and you choose not to roll over the taxable distribution, you will also be subject to an additional IRS 10% early distribution penalty tax when you file your taxes for that calendar year.
If you elect to roll over the eligible distribution, it is your responsibility to ensure that the institution you name will be able to receive this direct rollover from NYCERS.
The taxable portion of any prior loan balance is also available for rollover at retirement. However, you must accomplish this rollover on your own because the distribution was previously given to you. You will receive a post-retirement rollover letter approximately 30 days after you have retired explaining the exact amount that is eligible for rollover. You will have until the due date (including extensions) of your tax return for the year in which the distribution was made to roll over the taxable portion to an eligible retirement plan. Before you file for retirement, visit NYCERS to learn about the tax and retirement benefit consequences of an unpaid loan and about your repayment options.