There's no such thing as a structured settlement loan. These are usually factoring companies that actually buy your future payments. This is an option for people who own structured settlements. You can sell all or part of your expected payments at a reduced rate in exchange for cash.
If you have a structured settlement, you may need a large amount of cash sooner than you expect to receive in your settlement payment schedule. Some people seek to use their structured settlements as collateral for a loan. Before you withdraw your structured settlement, consider the price you'll pay and some of the other drawbacks. By selling a structured settlement, you get the money you need, now, without the need for credit card cash advances or tedious bank loan applications.
Settlement loans can be the answer to your financial problems without posing any risk to you or your credit history. While there is a cost associated with withdrawing a structured settlement, there are also benefits to doing so. Collecting a structured settlement generally requires working with settlement buyers or factoring companies that specialize in purchasing settlements and providing a lump-sum cash payment. The federal Structured Settlement Protection Act states that court approval is necessary to ensure that the sale of payments is in the best interest of a person.
They are an advance of part of the purchase price for the sale of your structured settlement payments. Structured settlement financing is actually a cash advance on a demand settlement that you have already won, either by speeding up the payment process or exchanging small payments over time for a one-time cash payment today. Structured agreements are often designed to take into account your future income needs, ongoing medical bills, your income from other sources, and other future financial obligations, such as college tuition for your children. Structured cash settlements provide a stable and reliable cash flow, often for several years or even for the rest of your life.
Instead of waiting for your agreement to be completed or subsisting on leaking installments, settlement loans pay you up front. Collecting a structured settlement generally requires a judge's review and approval before finalizing the sale. So, if you need to get a mortgage, for example, you can get documentation from your structured settlement manager to show the income you will receive from your structured settlement. Even though your structured settlement can't be used as collateral, you can use it to prove you have income to repay a loan.
A person who sells structured settlement payments to pay back loans needs different options than someone who wants to pay for a car with cash. When a structured settlement is established, payments are often made through an annuity purchased on behalf of the payee and managed by an insurance company.