Posted by on August 18th, 2011
Structured settlements are a form of payment that is awarded in lawsuits and lottery winnings. Courts usually award such thing as a payout for the judgment reimbursements. with lottery winnings, structured settlements are usually chosen by the winner because the long-term payout is larger than the lump sum option.
Unfortunately, many people who receive the money often find themselves in an unexpected financial bind. Things like car repairs and medical emergencies don't wait for you to have the funds available. in these situations, and others, you can turn to structured settlement loans.
These loans use the payouts of the structured settlement as collateral for a loan; you get the loan and they are used to repay the loan. You get a lump sum payment to use as needed. When you're shopping around for the best places to get loans, there are a few key things to keep in mind.
First, not just any business can give out such loans. Financial institutions are the only companies that can provide these loans. these companies can include banks, but generally they will specialize only in these types of loans.
You must also seriously weigh the pros and cons. Structured settlement payments do not count as taxable income, but lump sum payments do; you will be responsible for the tax liability of structured settlement loans. Also consider the long-term consequences; if you sell your settlement, you don't have that guaranteed financial assistance.
You should also consider the amount of the loan. many people do not know that they do not have to lose the entire level of payments they would receive. it is possible to get loans using only a portion of the payouts. this gives you the benefits of both; you get the lump sum you need as part of your payout and then you can continue to receive payments when the loan is repaid.
Regardless of why you need the lump sum of money, you should always pay close attention and be knowledgeable about the process. Check the credentials of the lending institutions that you are considering. Have a lawyer examine the loan contract papers before you sign anything so that you understand what the terms, conditions, and interest is for the loan. Familiarize yourself with current values for interest rates to ensure that you aren't getting charged outrageously high rates. Always look for possible hidden fees and costs that weren't discussed during the initial loan negotiating.
Understanding Structured Settlement Loans
Tags: financial institutions, loans, reimbursementsRelated Posts
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