Student Loan Money Problems: A Very Unusual Solution

Is it possible your student loan money problem can be solved more easily than you think? For some students, it's true, they just don't realize it yet.

Let's take a look at a little know solution to the problem of a student loan. And this works all over the country, for a New Mexico student loan or one in South Carolina or New York.

And it works internationally as well. More about this below.

Where to Find This Loan

Believe it or not, some of you can access it without any bank or even filling out the FAFSA. And you can have a check in your hands quickly, because in most cases, you don’t' have to qualify for this money.

What is it?

A cash value life insurance policy.

And if you don't have one, maybe someone else in your family does, perhaps one of your parents or grandparents.

By the way, you can also download my free ebook of grants and scholarships.

What Kind of Insurance Policy has Cash Value?

Only some policies have this feature. Term insurance never does. The kinds that do have names like Universal Life, Whole Life, Variable Life, and Variable Universal Life. These are also known as permanent life insurance.

How This Loan Works

When you have one of these policies, you make your payment every month to the insurance company. Part of that goes toward your cash value balance. You then have the option of borrowing some of this money.

If you borrow against the policy, you can use the money as you want. You can invest it, spend it, use it as student loan money, whatever. You just have to repay it.

Yes, you will have to pay interest on it.

And if the owner of the policy needs the insurance for a claim, the student loan money your borrowed would count against their balance, lowering the value of the payout. If the loan isn't repaid, the insurance policy could also be canceled as well.

Interest Rates

To borrow this money, you would need to pay interest. The insurance company will charge roughly 5-8%. That's not for sure every time, but should be close. If you borrow this money from your parents, you might want to pay a little extra to make sure you cover all their costs.

And don't be surprised if they want to charge you a couple of percent more than the loan to make sure they make their money back.

International Students

Students outside the US can use this idea, too. The catch is just the cash value policy. Any country that allows cash value life insurance policies will have some people who can loan to others using their policy.

So this can work as a Canadian student loan or a in the UK. While I am not a licensed agent in any country, it looks like it will work in India as well. You get the idea. Check in your country and get good advice.


Now, a bit of a warning: Don't go sign up for a life insurance policy just for the loan privileges! You will have to make many payments before you see any appreciable cash value.

In other words, the way to use this is to borrow student loan money from someone who already has a policy. Loaning money to you could make them a few dollars by charging you a bit more than they pay.

If you borrow it, pay it back. Show them that their faith in you was well placed.

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