You need to come up with some quick cash, and the income you are currently receiving isn’t enough to cover your expenses. Fortunately you are receiving structured settlement payments. With several options to choose from in the marketplace, how do you know which is the best for you? Because these situations often arise with a sense of urgency, it’s important to fully understand all of your choices so you don’t bury yourself in even more debt.
In this article we will explore the differences between a structured settlement buyout and a payday loan to help you determine which option will put you on the path to financial stability.
How is a structured settlement loan different from selling a structured settlement buyout? First, structured settlement buyouts are often incorrectly referred to as “structured settlement loans.” By selling your structured settlement for a lump sum, you will get your own money sooner. Unlike a loan, which has to be paid back, the funds you receive in the lump sum are yours to keep. There are no fees, penalties, or other obligations once it is approved by the court.
The drawbacks of installment and payday loans
Now that you know the so-called “structured settlement loan” is a misnomer, we’d like to draw your attention to some other financial options that may prove detrimental to your financial situation. Besides possibly having to put up other valuables, like your home or vehicle as collateral, installment or payday loans can help with a short-term financial pinch, but put you into more debt in the long run.
If you find yourself unable to pay back your loan, you may be subjected to fines and penalties that can sink you further into debt. Moreover, if the loan falls into delinquency, the lender can turn you over to collections and wreak havoc on your credit score, making it difficult to obtain loans in the future. Payday loans are short-term loans you can pay back over the course of a few weeks and typically amount to a few hundred dollars. This may seem harmless at first, but the interest rates and fees can really add up.
Other disadvantages of payday loans
When paying back your loan debt, you may be able to work with the lender to extend the due date—but it’s not without a cost to you. Expect to accrue more interest at an exorbitant rate.
Some payday loan APRs can be as high as 1000 percent! Your inability to pay back what you owe could damage your credit score. If you are lucky enough to be receiving payments from a structured settlement, you can avoid falling into these predatory lending practices. Of the options discussed here, selling your structured settlement is the only one that does not put your financial future in limbo.
With a structured settlement buyout, you are receiving your own money sooner with no need to pay it back. A loan requires you to pay back money over time, and if unexpected expenses arise, your circumstances may cause you to miss payments and incur penalties, fines, and late fees. Avoid falling into a cycle of constantly owing money by selling your structured settlement payments for cash.
When you are ready to receive a free quote, contact RSL Funding, and we’ll help you get your finances back on track.
