Whether you need money for a new house, car, college tuition, or something else, the first place that many people go to is their bank. There are so many banks to choose from, but actually securing funding from one can be quite difficult.
Here are some things to consider if you’re trying to decide whether to sell structured settlements or take out a bank loan to get the funding you need.
How the Bank Loan Process Works
There are several different types of bank loans: open-ended loans, closed-ended loans, secured loans, unsecured loans, and payday loans — which are popular but often send borrowers spiraling into debt. Personal bank loans work by entering into a formal agreement with the lender to pay back your loan in installments.
It’s important to understand the interest rates, repayment flexibility, loan term, and fees before agreeing on a bank loan. One benefit of choosing a bank loan is that the interest rates are often lower than you’ll find through other sources of funding.
However, the application process for bank loans is often time-consuming and complicated, and you’ll need to back up your loan with your personal assets. If you’re looking to start a new business and need extra cash to do so, keep in mind that the minimum amount for business loans is often much higher than those for personal loans.
How to Sell Structured Settlement Payments
If you need cash now to start a business, make a new investment, or make a large purchase, another option to consider is selling your structured settlement payments. At Novation, we buy structured settlement payments and annuity payments for lump sums of cash to meet your immediate financial needs.
Unlike bank loans, you don’t have to put down any collateral to sell your structured settlement payments, and you don’t even need to sell all of your future payments if you don’t want to. When you sell these payments, you don’t have to make principal payments or worry about interest rates. Selling structured settlement payments can also help you avoid going into debt, which is a huge advantage with this option.
Making the Right Decision for Your Financial Situation
The decision to either sell structured settlement payments or apply for a bank loan is a very personal one that only you can make. Going through a bank can be advantageous if you have need of other services the bank offers, or if you need more money than your structured settlement is worth.
Ask yourself questions about how much you need to borrow, how soon you need the funds, and what repayments you can afford to make. However, if your financial situation allows you to sell at least some of your structured settlement for cash now, you may be able to avoid unnecessary debt down the road.
Sell Your Structured Settlement with Help from Novation Experts
Contact the experts at Novation Settlement Solutions for more information on how to sell your structured settlement payments. Call us today at 1-888-979-3740.
*Novation is not a financial advisor or consultant and strongly recommends that you speak to a lawyer or accountant before making any significant financial decisions.