I'm in somewhat of an odd situation w.r.t. my college tuition payments. My school bills me half of the annual tuition amount before every semester. However, my college funds are in an annunity that pays out annually over 5 years. So, the annual payments from the annuity are less than the years tuition bill, but the total of the five payments more than cover the cost.

So, each year I've borrowed for second semester, and paid off when the annuity pays out each summer. Obviously, I've had to borrow more every semester, but it was within the reach of family credit lines, and a student loan last year.

Now though, I'm facing a bill for pretty much $20k come next semester. It's possible to do a private student loan, but paying $650 in interest + more in fees doesn't really appeal to me.

Which brings me to my question: For 21 y/o college student with good credit and a totally assured ability to pay, what's the best possible way to borrow $20,000 for 6 months?

  • 2
    can't you borrow on the account of the future annuity payment from the company that manages the annuity?
    – littleadv
    Jul 18, 2012 at 19:44
  • It came from a structured settlement, so I don't think borrowing directly from the company is an option. Jul 18, 2012 at 20:30
  • Will your bank allow you to take out a personal loan? Jul 18, 2012 at 20:43

2 Answers 2


I can safely assume that a credit union or a bank, probably a bank based on the size of the short term loan would allow use of the annuity as collateral for the loan. Since the future payouts from the annuity will more than cover the total costs coming due for your education I'm sure the bank will have no problem loaning the money and you can see if doing a direct payment monthly to them will reduce the rate. You can try a credit union since they will most likely give you a more favorable rate. If you can get a credit union to do it, you will most likely be paying a lot less, but typically they want interest paid monthly and not at the end of the 6 months term.

There is also a service called TMS or Tuition Management Services which you can find at Tuition Management Services They typically also expect monthly payments but might do an alternative for you, they charge I believe a $60USD fee to use their service.

Also just flat out bank shop and demand the lowest rate, its guaranteed money so you should be paying LIBOR plus 1 at most, see if you can direct your next payout to them with the balance coming to you.


Depending on the the requirements of the annuity you might be able to pull back to part time for a semester, thus reducing the bill for that semester. During that semester either get a job that will allow you to save money, or get an internship related to your major. Some of these programs alternate between work semesters and schools semesters.

Many colleges have an installment plan, where the payments are due every month, they usually spread them out over a 10 month period. Most only charge a nominal fee to set up the plan. This would reduce the amount of money needed to bridge the gap to only a portion of the tuition payments for the spring semester.

You could also live off campus to save money. There is no guarantee it will be cheaper, but because the costs aren't fixed and due at the start of the semester, you might be able to stretch your budget.

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