Are Settlement Loans Really “Loans?”

If you have been receiving payments on a structured settlement, but now need a larger lump sum payment, you may be considering a structured settlement loan. The term “loan,” however, could give you pause. The settlement money is yours by law. Certainly you shouldn’t have to take out a “loan” to gain access to more of your money, should you?

Structured settlement plan may no longer fit your needs

A structured settlement is compensation paid to you for a successful personal injury lawsuit, worker’s comp case, winning lottery ticket, or similar situation resulting in a large amount of funds. Instead of turning over to you a huge amount of money all at once, a structured settlement provides regular payments to help provide you with a tax-free, guaranteed source of income over many years.

These payments may work well for you for a period of time, but if you get into financial trouble, they may no longer be adequate. Situations like the loss of a job, a medical emergency, a child going to college, or other life situations can put you in a position where you need more money, now.  Structured settlement funding can help you gain access to those funds much sooner.

Settlement loans aren’t really “loans”

If this happens to you, you have options. One is to sell your structured settlement to a legal funding source that has the cash on hand to give you right away. Lump sums provided this way are often called “settlement loans.”  Yet these are not really loans in the way that we’ve come to understand the term.

The money is already yours, so you’re not really “borrowing” it from anyone else.

When a legal funding company can help

A settlement loan is more like a cash advance on your settlement funds. The entity who was originally responsible for providing you with the funds—whether that be an insurance company, a liable party, or other source—typically does not have the total amount of your settlement on hand to turn over to you.

That’s where a lawsuit funding company can help. They have the money available to give you immediately. Then they buy the rights to the settlement fund, and invest it to gain a return at a later date. So in a way, they are “loaning” you the money and taking the risk that they will get a return over time, but as far as you’re concerned, settlement loans are simply advances on money you’re already entitled to.

Call LawStreet Capital today

If you’re in need of a lump sum payout on your structured settlement, LawStreet Capital can provide you with the legal funding you need. You can choose to either receive the entire settlement, or only a portion of it. All you have to do is fill out the application, and we’ll take it from there. No credit check, no risk to you. Call toll-free 800-345-8500.