Is It Better To Get A Structured Settlement Loan?
If you have a structured settlement, you may have considered selling your annuity to the highest bidder and be done with it. However, you may want to consider instead a structured settlement loan.
Structured settlement loans, or annuity loans, are when an annuity recipient borrows money against future annuity payments that they will be receiving. After paying a fee, you will have the money you need up front, and you can pay for the loan out of the monthly annuity payments you are receiving.
If you are trying to decide between a loan and selling your annuity outright, consider that a loan will take a little bit longer to course of action. Most annuity sellers will get their money within 45-60 days, while the loan may take up to 90 days. Court approval is also required for obtaining a loan on your settlement.
However, getting a loan on your annuity will most likely cost you less money overall then a sale would. Also, loans can cover any number of payments, while annuity buyers prefer 50% or more of your total annuity.
When you decide to take out a loan on your annuity, make sure to get all of the facts and figures up front. You may need an attorney or financial adviser to help you pick a good loan company to work with. Make sure to check into the reputation of the structured settlement loan companies.
Always ask for a quote. You should know up front how much of your annuity you will be getting, any taxes or fees involved, and also what the interest rate is your loan. If you are unsure of the quote or what different fees are involved, don’t be afraid to get a third-party involved to give you leverage. However, if the interest rate is more than 10%, you may want to consider selling your structured settlement instead.