Super Fitness Health BlogStructured Settlement Factoring Loan – Don’t Be Confused
Lot of searches are being placed on the internet for structured settlement factoring and structured settlement factoring loans. However there is really no such thing that exists. Sure there is a method of factoring as it relates to how companies decide how much money they are going to give you for your settlement payments but there is no such term as a factoring loan.
Confused, will you should be! Too often the term is used to represent the selling of structured settlement or annuity payments for a lump sum of cash. If you are award a structured settlement or annuity payment you are getting payments from something “you” already own so there for you don’t get a loan against it. Banks will refuse to give you a loan on money you already own.
Why So Much Confusion When it Comes to Factoring Loans
The problem is that instead of giving people what they need to know there are too many out there that relate the content to want people type in. So instead of writing about selling your structured settlement payments, which are highly, competitive people write about something else people type that doesn’t actually exist. I have read some articles where they tell people that in order to get the loan you have to sell your own payments.
Well if you have to sell the payments aren’t you going to get a lump sum of cash for the payments that you are selling? If so, how could that even be considered getting a loan for your settlement payments? The way it really works is that you will give a settlement buying company some of you payments from the insurance company and in return they will give you cash usually of lesser value then want they receive from the insurance company. So they get 100K from your insurance settlement company and you may in return receive a deposit into your account for 50-76k. Yes you actually lose some funds in the process but you get the lump sum you needed.
So How Does the Structured Settlement Selling Process Truly Work?
Well you have chosen to get monthly settlement payments and want to get a lump sum of cash for whatever reason. Unfortunately you cant go to the insurance company because the contract you signed cannot be changed or altered at this point. However you can find a structured settlement company that will buy your future payments.
When you find a company and amount you are happy with you will submit all of the required paperwork. This will be sent to the courthouse and a hearing will be scheduled. This has to be approved by the courts to make sure that individuals with settlement payments are not being taken advantage of. If the judge approves the sale of the settlement payments the buying company has up to 3 weeks to make sure you receive your payment. The entire process can take anywhere from 4-10 weeks sometime less or more.
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