Sometimes things get tough in life and you look for ways to obtain cash that normally wouldn’t seem normal. That is why you see payday loan signs and pawn shops in just about every city in America. When you sell something like your gold to a pawn shop you are almost certainly not going to get a reasonable value for it. There are too many situations where you hear about people who consign their goods and they end up never going back to get it.
This is what we like to call “Selling when you have to, not when you want to.”
The world of short term cash loans is a very similar industry where buyer’s remorse happens almost immediately. If the difference between your children starving and the electricity is getting shut off or having money when you need it does make sense for some type of short term loan.
The important thing is to make sure to investigate the terms of the loan. If you are pulling out a loan that has a large interest rate to start a business than you should look to the Small Business Administration for a loan as opposed to getting a high interest loan that may hinder the success of your business.
Selling out your business’s future profits whether to a bank that is overcharging you or an investor is another example of “Selling When you have to, not when you want to”. Life insurance is just another famous example where individuals have policies that they pay premiums out for years and end up needing money and transferring the policy over in exchange for whatever money they can get to survive but losing the life insurance policy can be very detrimental and yet another example of selling when you have to not when you should be.
Can You Split The Sale of a Structured Settlement? What About Selling This?
This is one of those situations that can go either direction.
If you need the money that is due to you in the future but you cannot touch it today then it’s barely usable and thus may not be as valuable and in the same category as the options listed above. A structured settlement is a payment that is structured and comes typically as a result of a personal injury lawsuit.
There are brokers and insurance companies that are predominantly involved in the game. The difference between this sale and the short term loans are also the fact that you can pick the amount of money you want to sell and still maintain the premiums that are due to you.
When you do a transfer there are fees for transferring a structured settlement from the current owner to the new payment right holder. If you are owed $350,000 that is paid out annually from an insurance company like American General then you can decide that you only want to sell off $75,000 of the total $350,000 in payments and not take too big of a haircut on the money advanced to you.
When it comes to getting advances against your next paycheck it is hard to work out a deal to avoid any sort of shorting. So there are some instances (not many but a few) where there are opportunities to sell when you have to and not have it ending up being that you didn’t want to.
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