A structured type of settlement loan is extended to an individual based on a structural settlement that is taken as security or collateral for the loan amount. This type of loan would provide the individual with a sum of money on the front end. This money can then be paid via settlement payments over a period of time. This way, individuals needing money immediately would be able to opt for structured settlement loans in order to get the money as well as repay the same according to terms.
In the case of a structured settlement, the court would order the settlement payment to be structured or divided into a series of payments rather than asking for the loan amount to be repaid as one lump sum. These settlement payments can be on a monthly, semi-annual or annual basis. The only problem here is for individuals who need the settlement money immediately to take care of current debts or monetary obligations.
A structured settlement loan on the other hand would help these settlement recipients finish off their pressing debts immediately without having the need to wait for these annuity payments. The loan would enable these individuals to pay off all their existing debts and then start making installment payments (including the interest amount on the loan principal) to pay off this loan. Individuals can also structure their installment payments to coincide with their semi-annual or annual settlements payments to avoid any hassles in paying off the loan.
A structured settlement loan, in this case, would be considered as a practical solution as it would help an individual to resolve all of his/her outstanding debts, leaving him/her with only one loan to pay off at the end. This in turn would greatly simplify the process of managing personal finances, thereby providing peace of mind to the individual.
Those who provide the option of a structured settlement loan for their clients would usually decide the loan amount based on a certain percentage (70% or 80%) of the actual settlement amount. This way, the lender is assured of money returning to him/her via the annuity payments if the debtor fails to pay the money. This would, in turn, reduce the risk faced by the lender and improve his/her chances of getting a better rate of interest when compared to other types of loans.
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About the author
Michael Smith is the Customer Experience Director at 911 Lawsuit Loans LLC and is responsible for client relations throughout the funding.
Author:Mike Smith
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