Health & Fitness

The Ultimate Guide to Settlements

A Useful Guide to the Structured Settlement Loan Process

Almost anyone residing in the U.S is eligible to receive a structured settlement loan. Most people pursue structured settlements to receive compensation from individuals or businesses in the result of a lawsuit. Compensation is provided in equal installments and over a fixed period. The installments are delivered through as collateral or in the form of a life insurance agreement. Applying for a structured settlement loan is very easy.

Here is what you need to have in place before you apply. First things first, you need to know what type of structured settlement you have. If you are planning to take out loans or financial leverages, so you can use them as collateral, there may be a clause that permits you from doing so. You are eligible to apply for a loan if there are no such restrictions permitting you from doing so. There is the possibility that you will need permission of court in order to gain approval. In the instance of a personal injury lawsuit, you might need to receive permission from the insurer or the defendants. Once you’ve taken care of these initial steps, you’ll be ready to begin the loan application process right away.

The financial institution will accept your application after they scrutinize the delivered documents. The processing length can take up to 120 days in some cases. You also might want to consider the option to sell your annuities. If you go down the path of selling annuities, you can receive the money in 45 days or less. Keep in mind, there will be fees once your application has been processed and approved. The fee and other charges will deduct income tax from the total loan amount. If you only spend what is needed, you will be able to pay back the loan via the annuity payments made to you.

The disbursal of your loan should be compared with the sale of your settled agreement. In the event of an annuity sale, you might be responsible for higher fees and a deduction of taxes. This will terminate your settlement, and will make you ineligible to receive payments in the future. The way to avoid this from happening is to take the loan out as a structured settlement. That said, you will have to repay your loan.

Usually, annuity buyers buy 50 percent of settlements, although most of the loans cover the entire payment plan. With this option, you have a lot of flexibility, because you can spend your loan in a variety of ways. Don’t ever proceed with a structured settlement loan, without first checking the lender’s credentials. If you choose to hire a lawyer, you will protect yourself from any hidden fees or conditions you may have overlooked.
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