What actually is a settlement loan and who should consider applying for one? A settlement loan, in a nutshell, is money that you borrow from a lender, with the objective of settling and consolidating your outstanding debt. The lender will basically work with your creditors and pay them off. As a result, you won’t have to deal with all the monthly payments and charges for credit cards and other liabilities anymore, but instead, pay back the lender by sending him one consolidated payment every month. It is not uncommon, that this consolidated payment is meaningfully lower than all the other payments you had to deal with combined.
This will leave you with more money in your pocket at the end of the month. Can people with bad credit still qualify for a settlement loan? Yes, absolutely. There are many lenders out there who are still eager to get the business, irrespectively of your credit standing. You can apply for a settlement loan via your bank or any other financial lending company. A good starting point to inquire about reputable settlement loan lenders is the Internet. Most of them have online calculators available that let you evaluate different kinds of scenarios and loan options. This can help you to get a concrete understanding of how much money you will be able to save on a monthly basis. Further to that, it will also tell you what payment options you have and how long it would take you to pay the loan back in full.
A credit settlement loan can also be a viable option if you face bankruptcy. But of course, before you jump to conclusions and sign a contract prematurely, make sure that you were provided with all the terms and conditions of the settlement loan. The biggest question mark is always the Annual Percentage Rate (APR). This rate can vary and is based on numerous factors, including market conditions, inflation rates, the state of the economy, etc. Further to that, the type of loan has a strong influence on the APR, too. There is a difference between an unsecured and a secured loan, or a mortgage.
And needless to mention, your credit score is another major contributing factor. There is one more point you need to pay special attention to hidden fees. Make sure and if necessary, ask your lender repeatedly to disclose all the fees and charges, including penalties that may apply to your loan. Just to give you an example; some lending companies charge you with a penalty in case you pay back your loan earlier than the actual due date. A personal injury settlement loan can be also a considerable option for anyone who has to deal with medical bills, like victims of cancer, mesothelioma or other asbestos-induced diseases. Both, my wife and I are cancer patients and we do struggle with our debt that was caused by keeping up with our payments for treatments. We are currently looking into options to consolidate our debt.
In sum: make sure you get all the facts together so you can make an educated decision before you sign any kind of settlement loan paperwork. Be cautious; especially if an offer sounds too good be true. And try to find and work together with an accredited and reputable lender. The last thing you need is finding yourself trapped in a situation that adds on to your financial burden, as opposed to eliminating it.