Instead of using the installment plan, could I borrow money to make the lump-sum payment?
Yes. A bank or other financial institution may be willing to lend you money to make the lump-sum payment. You may then arrange payment terms with the financial institution that may be more flexible than those in the Prepaid Plan’s installment payment plans. Interest on a loan secured by a home mortgage, used to finance the lump-sum payment, may be deductible for Federal income tax purposes, with certain restrictions. Detailed information regarding the tax consequences is available from your tax advisor. (Neither monies paid into the plan nor benefits accrued through the plan may be pledged for the purpose of securing a loan.
