Pre-Settlement Loans vs. Selling Your Settlement
Understanding the tradeoffs between these two cash-now options.
| Feature | Pre-Settlement Loan | Selling Payments |
|---|---|---|
| Legal Protection | Limited regulation | Court approval required |
| Cost Structure | Monthly interest (often high) | One-time discount rate |
| Repayment | Monthly payments | No repayment (sale is final) |
| Timeline | Days to weeks | 30-45 days |
| Risk Level | Higher (debt obligation) | Lower (court protected) |
Key Considerations
- Loans create debt; sales don't
- Loans often cost more over time
- Sales require court approval
- Loans may be faster but riskier
When to Choose Each Option
Consider a pre-settlement loan if:
- You need cash within days
- You can repay quickly
- You want to keep all future payments
Consider selling if:
- You need a larger amount
- You want to avoid debt
- You can wait 30-45 days