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 Posted: Tue May 25, 2010 12:28 am Post subject: Collateral Assignment Loan |
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| I have a whole life insurance policy valued at over $243k that I have maintained since 2002. It barely has any cash value at this point as I have withdrew from it over the years for emergency purposes and I now want to use it to eliminate debt. Major banks and credit unions don't give secured personal loans anymore and I can't find any lenders who do collateral assignment loans AGAINST life insurance policies in New York. My insurer provides the collateral assignment form, but don't do the loans. Any guidance would be appreciated. |
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camarasutherland
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Joined: 25 May 2010
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| Posted: Tue May 25, 2010 11:22 pm Post subject: |
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Your insurer does do the loans. They don't need the collateral assignment form because they have the policy as collateral. They won't lend you the money because without cash in the policy, they have no way to make sure that they get their money back. This is the same reason that nobody else is going to give you a loan with this policy.
In your case, the life insurance is close to worthless collateral because you aren't close to death, there is no cash, and there is no guarantee that the policy won't lapse.
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falfjaljf
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| Posted: Wed May 26, 2010 2:06 am Post subject: |
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Yup, you need cash value in order to pledge for collateral.
You might be able to convince some lenders to look at death benefit. But if there major concern is securitizing the loan with actual collateral, death benefit alone will not get the job done. |
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BNTRS
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