What is a structured settlement loan?
Structured settlements are securities arising from being awarded compensation by a court after suffering an injury in tort. One maybe receiving monthly or yearly payments depending on the agreement in place between the payer and the claimant. Sometimes, expenses that are being incurred by claimants maybe to many to be covered by such a security. This prompts one to take a loan against the security to cater for expenses like medical bills.
Steps in getting the loan
Start by reading the annuity agreement in order to understand fully the terms of the agreement. There may be a clause that prevents one from taking a loan. Proceed to finding a third party firm that will accept the terms for a loan agreement. This takes time as it requires extensive online research and recommendation from friends and relatives.
Upon settling on desired firm, begin the paperwork immediately. Note that this step is time consuming as the court must be involved in the process. Be sure to involve a lawyer in the process in order to ensure legality of various transactions. Provide viable reasons as to why you need the loan and upon satisfaction by the court one is allowed to proceed to the next step.
Proceed to getting the loan. The judge ought to approve it before it is wired directly to your account. In some instances one is issued with a check which they can cash it in in their banks.
Advantages and Disadvantages of Structured settlement loans
One benefit of such loans is that one is able to settle their urgent needs for example credits. One is also cushioned from future uncertainties in the economic conditions of a country, for example inflation. In addition to this, one is able to have money at hand which may be in excess to invest, for example starting a business.
The demerit of such loans is that in the long run, one has to pay the loan with an interest. Such interest may affect a person’s finances in the future where uncertainties on economic performance lie. However, depending on the situation one is in, they may find it comfortable to take up the loan.
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