Who Gets the Interest?

Every loan has two sides: the borrower who pays interest and the lender who earns it. Most families spend much of their lives on the paying side.

Add up a lifetime of car payments, equipment loans, mortgages, and other financing, and the interest can represent a significant amount of money. Over time, those interest payments contribute to the lender’s revenue and, ultimately, its financial strength.

The Infinite Banking Concept asks you to consider a different arrangement. When you use a properly structured whole life policy as part of your financing system, policy loans can provide access to capital without requiring you to withdraw the policy’s cash value. You can then repay those loans on an intentional, “honest banker” schedule, rebuilding the capital available within your system while the policy continues according to its terms.

The goal isn’t to avoid paying interest. Borrowing has a cost, whether the lender is a bank or an insurance company. The question is whether you can structure your finances so that more of the economic benefit associated with your financing decisions stays connected to a financial system you own and control.

The question isn’t simply, “What interest rate am I paying?” It’s also, “Where is that interest going—and what role could that capital play in my family’s financial system?”

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