Loan Against Pension… Or Not?

You might be thinking that this whole process seems a lot like a “loan against pension” type of setup.

Understandable.

From an initial glance, it does look like you’re borrowing against your pension. In reality, however, you’re not.

You can more properly think of this as a pension cash advance, or a partial/total pension sale. Think of your pension as an asset you can sell versus an asset you can put up as collateral. You sell a certain percentage of your stream of pension payments for the next 8 years and in return, you receive a lump sum pension payment.

As I mentioned on the Pension Loans page, most/no lenders would even begin to consider your pension as collateral, and neither do we.

So why can you borrow from other streams of revenue, such as your 401k, but not your pension?

Look at it this way, your 401k is a large lump some of money which you already own. It’s in your possession. You don’t own the entire amount of your pension… or do you? The answer seems a little ambiguous. Banks don’t like ambiguity. You can’t just go to an account and take out the entire balance of your pension right? You only have access to your monthly, or yearly, payments. That’s a main reason why no one will let you borrow against your pension.

That’s where we come in. We give you the opportunity to take a huge chunk of your pension all at once and do as you please with it.

In the end, what seems like a loan against your pension is really a convenient way of selling your pension.

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