Settlement Loans Vs. Traditional Loans

When considering a settlement loan you should always know the differences between a settlement loan and a traditional loan. They are two complete different ways to obtain fund during a pending lawsuit when a client has no income. This article is designed to explain the differences between a settlement loan and a traditional loan and allow the reader to determine which can be a better solution.

Traditional Loan

A traditional loan can be compared to normal loans; this includes auto loans, mortgages and other types of unsecured credit. Basically a lender is providing you money up front, which is to be paid back on a set schedule with a pre-determined interest rate. Your credit history and current credit obligations affect the amount of interest and amount of money that can be loaned.

A traditional loan must always be paid back according to the agreement between the lender and the person receiving the loan; regardless of income changes or living situations. Missed payments can result in negative marks on your credit history, resulting in higher interest rates and make it harder to achieve loans in the future. In some cases, if you miss too many payments over a period of time you can lose the item you bought the loan with; like a house or automobile.

Settlement Loan

A settlement loan is much different than a traditional loan; in fact you can’t even consider a settlement loan an actual loan at all. It’s more like a lending provider buying interest into your lawsuit. They are providing you an advance on your possible winnings in a lawsuit in return for that amount back with interest. A settlement loan is based solely on your current lawsuit case; your credit history and current income play no role what so ever in the decision process.

What stands out the most in the differences between a settlement loan and a traditional loan is a settlement loan does not have to be repaid if the case is lost! Yes, that means if you lose your pending lawsuit you do not have to pay back one dollar to the settlement loan provider. You’ll also not receive any marks on your credit history, nor will it affect any future chances of receiving a settlement loans.

Summary

As you can tell from reading this article a settlement loan can be far more beneficial and smarter financial move if you’re attempting to obtain financial funds during a pending lawsuit. However, situations are different and sometimes a traditional loan might be the only way for someone to go. This article author believes you should apply for a settlement loan prior to a traditional loan. Remember, if you receive a traditional loan and lose your case your still obligated to pay it back!

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5 Tips Every Loan Modification Firm Talks About

Here's a list of loan modification do's and don'ts to help you avoid common pitfalls.

Do know your rights.

More than 80% of mortgage contracts violate one or more lending laws-and most of them go unnoticed. But these violations can be your biggest weapon in the loan modification process. They can give you the leverage you need to negotiate with your lender and stop foreclosure. Your loan modification attorney can help you understand your rights and use them to get the results you want.

Don't wait too long.

The foreclosure process is designed so that you have time to get back on your feet and save your home. But that doesn't mean it's safe to procrastinate. The longer you wait, the harder it gets to get you out of that fix. As soon as you decide you need mortgage help, call for a loan modification help and get started.

Do work with your lawyer.

Your Home Loan Modification doesn't rest in the hands of your lender, your broker, or your loan modification attorney. These people can help, but you have to do your part and cooperate with your lawyer. Make sure to submit your paperwork on time, answer questions honestly, and give them a clear picture of your financial situation.

Don't file for bankruptcy, unless you really have to.

Many people think that filing for bankruptcy can help them stop foreclosure. But data from the American Bar Association shows that it doesn't work that way. In fact, 96% of the people who file bankruptcy end up losing their homes anyway-so they're left with a foreclosure AND a bankruptcy on their records. In some cases, bankruptcy is still a viable option, but don't make any decisions without getting professional advice.

Do have a backup plan.

Not all people will qualify for a mortgage loan modification. Maybe you've fallen too far behind, your lender may be simply hard to work with, or maybe you don't need it after all. In any case, it's always good to have a Plan B. Your mortgage modification attorney can help you find the best solution. If you can't get your loan modified, talk to your lawyer about a short sale. This involves selling your home for less than its fair market value and giving the proceeds to your lender. Although you still lose your home, it's not as damaging to your credit as foreclosure, so it's easier to get back on your feet.

The Loan Modification Firm has all the experience and knowledge that is needed to get the job done. The Loan Modification Attorney can be reached at Law Offices of Marc R. Tow Just Call 800-738-1170 or visit Home Loan Modification.

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