Private Lending IRA

With a Private Lending IRA from Kingdom Trust, you have the opportunity to lend your retirement account funds out to other individuals and companies via promissory notes with the benefit of earning interest on the loans.

How can I invest in debt through my Private Lending IRA?

Investing in promissory notes can actually mean a number of things. It can mean the purchase of an existing promissory note. This situation can arise when a lender makes a loan and then sells the loan. If you’ve borrowed money to purchase a home, you probably experienced this situation. It’s very rare these days to find a lender who actually services a loan from inception to payoff, as typically the loans are bundled and sold.

In the same way, your self-directed retirement account may be able to purchase a loan. For example, a small lender or an individual will make a loan and then need to recover the money lent for some purpose (other than borrower default). This provides an opportunity for the cash or liquid assets in your IRA to purchase the note and its associated payments. More often than not, the lender will be willing to sell the note at a discount and you will not only enjoy the interest but some of the principal as well.

It can also mean turning your retirement account into a bank. While some loans can be secured by real estate, there are also loans to be made for the purchase of automobiles, business equipment, and anything else that someone might want to purchase with credit. The keys are that the loans can be made from your retirement account and that you can set your rate of return by setting the interest rate and charging origination fees.

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