Understanding All About Structured Settlement Loans
You can get structured settlement loans in almost all states of the United States. Mostly, people enter into structured settlements to get compensation from companies or individuals after lawsuits. This compensation is paid within a specified period of time and in equal instalments. These premiums are mostly in the form of a life insurance agreement that can also be used as collateral for loans. The procedure for applying for Structured Settlement Loans is quick and easy.
If you want to apply for a loan, you must first understand what type of structured settlement you have. It would be a mistake to apply for a loan when your structured settlement contains a provision that you cannot obtain leverage or loans using the document as collateral. However, in the absence of such restrictions, you can apply for a loan. A court’s permission is still required if a settlement is reached under its instructions.
You will also have to seek permission from the defendants and the insurance company if you are out of a court settlement of your personal injury case. You can immediately start the loan application process once you are sure that there are no legal restrictions or obstacles.
The financial institution or bank can 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 much time since you can have the money in 45 days or less.
You will have to pay the fee once your application has been processed and the loan approved. These and some other fees and a few jurisdictions also deduct some income tax on the loan amount. However, you can spend the loan amount according to your needs and pay it back in annual payments.
Compared to settlement sales
You should compare the sale of the settlement agreement to 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 stop your settlement agreement, and you won’t get any payments in the future. If you took out a loan under a structured settlement, the original settlement plan will remain the same, but you will have to repay your loan with these payments.
Most installment buyers only buy 50 percent settlements, but most loans are spread out to close to 100 percent of the payment plan. This provides much better leverage to all those who take loans as they can spend on a number of options, including investing in real estate.
Check the lenders credentials for the structured settlement loans you are considering. Hiring a lawyer is preferable because they can examine the loan contact papers before you sign them, and they will make sure you understand the terms of the loan, interest, and other terms. Also check for any hidden costs and fees that were not discussed during the initial stages. Find out the current interest rates for structured settlement loans to make sure you don’t charge fees that are too high.