A Guide To Structured Settlement Loans

By Allie Sanchez

We can find ourselves accepting a structured settlement for many reasons. Sometimes, for example, we may be offered this kind of deal after a lawsuit awards us compensation after an accident. Or, we may have a big lottery win and be offered a structured settlement deal instead of a one-off payment.

This kind of financial settlement can suit a lot of people who are potentially being awarded a lot of money. This kind of settlement will pay you your settlement in 'chunks' according to a schedule that you agree with the company paying out the money. So, you could opt for a monthly income, an annual payment or a lump sum payment every five years depending on your preference.

This can be a lot easier than managing a large lump sum. A lot of people given a lot of money can actually find it hard to cope with. They may simply go on wild spending sprees and fritter away their cash, they may give it away to friends, family and hangers on or they may simply not know how to invest it and invest it badly. This need not be an issue with a structured settlement deal.

Sometimes, however, the structured settlement that looks good in the beginning may start to look less attractive over time. You may want to have more money to buy a house or to buy a business on a beach somewhere sunny and hot. You can look at selling your settlement here -- either all or part of it -- but you may not wish to take this final step. In which case a structured settlement loan may be a better option for you.

You need to be aware that the legislation that governs what you can and cannot do with a structured settlement is not the same all over the world. Each country (and sometimes specific regions in a country) will have individual rules and regulations governing these settlements. So, in some cases you will not be able to sell your settlement or use it as collateral to raise a loan.

But, some forms of lending are available in some cases so if you are considering a loan as an option then you may want to investigate what you can do with your structured settlement. For example, in some places, mortgage lenders will view regular structured settlement payments in the same way that they view an income.

So, in this instance, you may be able to use a structured settlement as an alternative source of income to take out a mortgage. This can be useful in cases where you are no longer able to work but would like to buy your own home or another property.

Industry experts recommend that you always check out the legislation governing your structured settlement and its terms to find out what, if anything, you can do with it before you try to borrow against it or sell it on. This way you will know exactly what your options are and which solution will be your best choice to raise extra cash.

About the Author:
Allie Sanchez helps people learn about structured settlement tax at her website on selling structured settlement.