You can get structured settlement loans in almost every state in the US. Mostly, people enter into structured settlements to obtain compensation from companies or individuals after lawsuits. This compensation is paid over a certain period of time and in equal installments. These installments are mainly in the form of a life insurance contract which can also be used as collateral to obtain loans. The procedure to apply for loans with structured settlement is easy and fast.
Previous requirements
If you want to apply for a loan, you must first understand the type of structured agreement you have. It would be a mistake to apply for a loan when your structured agreement has a clause that you cannot obtain financial leverage or loans using the document as collateral. However, if there are no such restrictions, you can apply for a loan. The court’s permission will still be required if an agreement has been reached following its instructions.
You will also need to seek permission from the defendants and the insurer if you have settled your personal injury claim out of court. You can immediately begin your loan application process once you are sure that there are no legal restrictions or issues.
Application
The financial institution or bank may accept your loan application after examining and evaluating all the documents. Processing may take 90-120 days in some cases. On the other hand, selling your annuity won’t take as long since you can get money in 45 days or less.
You will have to pay fees once your application has been processed and the loan approved. This fee and some other charges and few jurisdictions also deduct some income taxes on the loan amount. However, you can spend the loan amount as per your needs and repay it with annuity payments.
Comparison to clearance sales.
You should compare the sale of the settlement agreement with the disbursement of your loan. If you have to sell an annuity, you may have to pay more fees and there will also be some tax deduction. This will end your settlement agreement and you will not receive any payments in the future. If you apply for a loan with a structured agreement, your original agreement plan will remain intact, but you will have to repay your loan with these payments.
Most annuity buyers only purchase 50 percent of the settlements, but most loans are spread over almost 100 percent of the payment plan. This offers much better leverage for all those taking out loans as they can spend on various options including investing in property.
Check the credentials of the structured settlement loan lenders you are considering. Preferably hire a lawyer because he can examine the loan contact documents before signing them and will ensure that he understands the loan terms, interest and other conditions. Also check for hidden costs and fees that were not discussed during the initial stages. Familiarize yourself with the current interest rates on structured settlement loans to ensure you are not charged outrageously high rates.
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