Can I get a bank loan with a structured settlement?
This is a common question for those who own a structured settlement. In many ways, a structured settlement could be seen as an asset. It is guaranteed money that is handed to you on a regular schedule, much like a paycheck. Unfortunately, the problem is, a structured settlement is set up in such a way so you have as little control over that money as possible. In fact, in order to maintain its tax-free status, it must relinquish control from you almost entirely.
If we look at this question again, it is easy to understand why a bank will not take a structured settlement into consideration when being asked for a loan. Another way to look at it, is even if they did, and you failed to make good on your promise; your policy provider would not honor the banks request to withdraw the portion of the money you borrowed.
However, there is another way to use your structured settlement in the same way as a loan, and it is called selling your settlement. In a sense you are borrowing money from yourself, and you won't need to pay it back. It will come out of your regular scheduled payments, and in many cases you can continue receiving monthly support after receiving the lump sum.
Note that you can choose to sell part of or all of your settlement.