Structured Settlement Loan

Yes, getting a structured settlement loan from a bank using your structured settlement payments is possible. Also, a structured settlement purchaser may offer you a cash advance.

There are two types of loans possible:

1. Unsecured Loan:
   A personal loan or any loan that is not secured by collateral. Your structured settlement payments are not used as collateral but can be considered income and thus help you qualify for a loan. Your credit history/score is also used for qualification. For a personal loan, an interest rate in the 6% range is possible with good credit.
   
   Structured settlement purchasers may offer an unsecured cash advance if you agree to sell your settlement payments to them. The advance money will be taken out of your lump sum payment to repay the company. Read the fine print terms before taking a cash advance.
   
   
2. Secured Loan:
   A loan where your structured settlement payments are used as collateral. There are at least two banks that do this type of structured settlement loan. Your credit history is less important (and may not be needed at all depending on the bank) because the bank is relying on the insurance company that issued the structured settlement annuity to make the payments on the loan.
   
   Even though it is a loan, the outcome is very similar to selling your structured settlement payments. You receive a lump sum of money and the structured settlement annuity payments are sent to the bank. The loan will have to be court approved and it takes about the same amount of time to receive the money as selling structured settlement payments (45 to 90 days after signing documents). One advantage over selling your payments is that you can pay the loan off early and start receiving those payments again. The interest rate on the loan is directly comparable to the effective discount rate quoted by structured settlement purchasing companies. For instance, if a structured settlement loan from a bank has an annual interest rate of 7%, and a structured settlement purchasing company offers to buy your payments with an effective discount rate of 7% these are basically equal deals (will cost you the same amount of money).
   
   Below are two banks that will provide a structured settlement loan using structured settlement payments as collateral (see update below):
   
   
   • Midland States Bank: contact MDS Group 1-888-818-4637
     • can pay off loan early with no penalty at any time
     • you will have to pay for bank costs for establishing the loan including attorney fees and court costs (these costs are capped at $1,500)
     • there is no minimum amount for a loan but typically loans less than $25,000 are not cost effective due to court costs, etc.
     • there is no maximum loan amount
     • there is no maximum loan term
     • your credit score does not affect your getting a loan since the loan does not rely on the credit of the person getting the loan but on the credit of the annuity issuer (insurance company). The annuity issuer will be sending the payments to the bank.
     • interest rate is determined by the bank, typically around 8%
     
     
   • Esquire Bank: contact Lee Ervin 1-888-407-3788 (update 4-4-2019 Esquire no longer offers structured settlement loans. Below is the offer they had in the past.)
     • you can pay off the loan early but you must keep it for a minimum of 2 years.
     • you do not have to pay for any attorney fees and court costs
     • the minimum loan amount is $30,000
     • the maximum loan amount is 90% of the structured settlement amount
     • the maximum loan term is 84 months (7 years). Thus you cannot get a loan on payments that are more than 7 years out.
     • interest rate is fixed at 8.5%

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