During the time of recession, there were many who were searching for liquidity and cash in order to stay afloat. Even when the economy started recovering, there are still some people who have an urgent need for money and for which they will turn to some of the unusual places. Selling off structured settlements, annuities and scheduled lottery payoffs became a popular option during recession. But if you’re someone who is still feeling the cash crunch, the aforementioned tactics are seen as a potential option.
Can you just take out a structured settlement loan when you don’t want to sell?
The answer to this question is No as you can’t sell off your structured settlement loans. The rates on the structured loans don’t matter as it is not possible to take out a loan against your structured settlement legally. In fact, when asked some eminent loan officers, each of them agreed that you can’t take out a loan using the payments of settlements as collateral. However, that doesn’t mean that you might not be possible to take out a loan.
Grabbing a loan
Basically, there are 2 types of loans which you can get, the secured and the unsecured ones. A secured loan is the money which is lent against a collateral. The collateral should be an object which is worth the dollars and can be seized if you fail to repay the loan. You will get such a loan when you purchase a car or a home. On the other hand, an unsecured loan is when you are lent money based on your signature and your credit score. There is no such valuable object which offers collateral for the loans. In case you default on the loan, you don’t lose anything but this hurts your credit score badly. So, you can well understand that there are no pros and cons of structured loans as there are no such loans in reality.
There are some people who will ask you how to withdraw money from their structured settlement account and you should know that this account is like a savings account. You just can’t withdraw money whenever you wish to. Annuity is a type of investment which pays out scheduled payments. If you see the structured settlement companies tell you that they can offer you loan, they will mislead you actually. Beware of the details before taking the plunge.
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