Is a Loan Settlement Agreement Right for You?
If you've been awarded money in a structured settlement, you're guaranteed ongoing payments for a certain number of years. In some cases, you may need more money than a single payment provides. Wouldn't it be nice to be able to access more of your money when you need it? A loan settlement lets you take out a loan against future payments from your settlement agreement. But is a loan settlement arrangement right for your needs? Consider these factors to help you decide.
Do You Need Your Settlement Payments for Living Expenses?
If the payments from your settlement are vital to your living expenses, you should be very careful about taking out a loan. Settlement payments that are "extra" money, investment money or that fund little luxuries are fair game. If you pay all of your living expenses out of your settlement, though, taking out a settlement loan against those payments could leave you in a very difficult spot.
Is It Legal to Take Out the Loan?
Settlement laws vary from one state to the next. Some states restrict structured settlement loans or require that they be approved by a trust attorney or other official. Check the laws of [statetitle] to be sure that the loan you want to take out is likely to be approved if it needs approval. Any Mahwah NJ loan company that invests in structured settlement loans can tell you what you need to know.
Do You Understand the Loan?
Settlement loans are, first and foremost, loans. Some Mahwah NJ loan companies will sell them to you as a way of "getting your money now." That's the same kind of thinking that had homeowners around the country cashing in on the equity "stored in their homes" a few years ago. When you take out a loan against your settlement, you should ask the same questions you'd ask about any loan: what is the interest rate, how much are my payments and how long do I have to pay them?
Structured settlement loans are a handy credit tool, but it's important that you understand exactly what they are: a loan. Settlement payments are structured for a reason. Before you choose to subvert that structure, be sure you understand the implications.