Understanding All About Structured Settlement Loans

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You can get structured settlement loans in almost all states of the US. Mostly, people enter into structured settlements for getting compensation from the companies or individuals after lawsuits. This compensation is paid over a set time period, and in equal installments. These installments are mostly in the form of life insurance agreement that can also be used as collateral for getting loans. The procedure for apply for structured settlement loans is easy and fast.


If you want to apply for a loan then you must first understand the kind of structured settlement you have. It would be a mistake to apply for a loan when your structured settlement has a clause that you cannot take out financial leverages or loans by using the document as collateral. However, if there are no such restrictions present, then you can apply for loan. Permission of court will still be needed if settlement has been reached under its instructions.

You will also have to seek permission of the defendants and insurer if you’d reached out of court settlement for your personal injury lawsuit. You can immediately start your loan application process once you are sure that there are no legal restrictions or snags.


The financial institution or bank can accept your loan application after scrutinizing and evaluating all the documents. Processing may take 90-120 days in some cases. On the other hand, selling your annuity won’t take that much time as you can get money in 45 days or less.

You will have to pay fees once your application has been processed and loan approved. This fee and some other charges and few jurisdictions also deduct some income tax on the loan amount. However, you can spend the loan amount as per your needs and pay it back with annuity payments.

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Comparison with the settlement sales

You should compare sale of settlement agreement with the disbursal of your loan. If you have to sell an annuity, then you may have to pay more fees and there would also be some deduction of taxes. This will cease your settlement agreement, and you won’t get any payments in future. If you take loan on structured settlement then your original settlement plan would remain intact, but you will have to repay your loan with these payments.

Most of the annuity buyers only buy 50 percent of the settlements but most of the loans are spread over almost 100 percent of the payment plan. This offers much better leverage to all those who take out loans as they can spend on number of options, including investment in property.

Check the credentials of the lenders of structured settlement loans that you are considering. Preferably hire a lawyer because they can examine the loan contact papers before you sign them, and they will ensure that you understand the terms of the loan, interest and other conditions. Also check for any hidden costs and fees that were not discussed during initial stages. Familiarize yourself with present interest rates of structured settlement loans to ensure that you aren’t getting charged outrageously high rates.

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