The structured settlements basics

The main difference of structured settlement loans is that the loans are made on base of a lawsuit win or a lottery win. Basically, a person receives a structured settlement when a person was a victim or personal injury, but in case of lottery winners, this is an alternative option through which they can extend their winnings for a longer period of time instead of having the entire amount at once.

You can never know which surprises life will bring. Sometimes people are in difficult financial situation when they need a bigger amount of cash urgently. This usually happens when they have to pay medical bills or other kind of accidents. However those who own a structured settlement might consider structured settlement loans.

Whenever you take a structured settlement loan means that you are taking now the money that you could be receiving in the future from the structured settlement. You don’t have to worry about paying each month to return the loan, because the structured settlement will take care of that. However there are a few things you have to be aware when you want to take structured settlement loans.

If you consider to find a company that will purchase your structured settlement, you need to be aware that this kind of loans are not available everywhere. There is a certain number of financial companies that are allowed to give structured settlement loans. There are also a small number of banks that can give structured loans.

If you consider taking a structured settlement loans you need to be aware of a few negative effects of this procedure. As you know, the regular payments that you receive from the structured settlement annuity are tax free. When you sell the settlement you will have to pay taxes for the lump sum payment and also the company will charge you about 10-30% from the initial amount. All this means that you will lose a lot of money if you consider structured settlement loans.