In this episode of the Infinite Mindset Podcast, Andy, Jared, and Scott dive deep into policy loans—what they are, how they work, and why they can be a powerful financing tool when used correctly. Along the way, they break down common misconceptions, compare policy loans to conventional debt, and share real-world insights.
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Loan math:
Daily interest accrual:
Loan Balance x (1/365) x interest rate
True Interest Cost:
Total Quantity of Dollars Paid in Interest / Principal Amount of Loan x 100%
Total Quantity of Dollars Paid in Interest:
[ (Monthly Payment x number of Payments) + fees + pain of enduring underwriting ]- cash price
Examples:
Daily Interest- $10k x 1/365 x 0.05 = $1.3698 ($1.37 per day when rounded)
True Interest-
#1 $10k x 0.06 x 365/365 = $600 or 6%
#2 $10k x 0.06 x 183/365 = $300.82
$5k x 0.06 x 182/365 = $149.59
$300.82 + 149.49 = $450.41 or 4.5%
#3 $10k x 0.06 x 304/365 = $499.73 or 4.99%
