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Can I Take a Loan Against My Structured Settlement?

With all the different financial products on offer today, and financial management becoming more and more sophisticated and complex, it's no surprise that many people are asking about loans and structured settlements. Specifically, there are plenty of people interested in a structured settlement loan. The idea is that you can get cash for structured settlements, and use the settlement as collateral. However, if you want to get cash for structured settlement, then you should look into selling it, as you cannot take a loan out against a structured settlement.

Why Can't I Take a Loan Against My Structured Settlement?

When you take a loan against collateral, like real estate, cars, or jewelry, the bank can seize those assets should you default and sell them to cover the loan. That's because these objects are real property. However, even though your structured settlement payments are assured, they aren't considered real property because they can't be seized by a bank. This is because any agreement relating to your structured settlement needs to be approved by a judge who agrees that it is in your best financial interest. More details regarding this can be found in the structured settlement protection act. As a result, banks do not offer a structured settlement loan. This is why it is hard to find structured settlement loan companies when looking into a list of structured settlement companies. If you need cash for structured settlement payments, then selling is your best option.

Cash for Structured Settlement

Selling your structured settlement will still take time, usually around a month, but it is the fastest way to get cash for structured settlement. It's the closest thing to a cash advance structured settlement product on the market right now, and will likely remain so for the future, baring substantial changes to current laws. Should you decide to sell your structured settlement you will need to find a qualified broker, and they will offer you an amount of money that is smaller than the total settlement amount, known as the discount value. This works the same way as an interest rate and is the way that these companies can make money. Structured settlement companies then use your structured settlement to offer various financial products to other individuals and firms. These financial products generate a profit for the structured settlement company, providing more resources to buy more structured settlements. As a result, it is easy to see how the financial workings of structured settlements can become quite complex, so make sure to talk to a certified financial advisor or planner before deciding what to do with your structured settlement.