You have a pending personal injury settlement and someone has suggested that you look into obtaining a settlement loan. The idea sounds good, but what sort of commitment are you taking on? Specifically, will the lender impose any restrictions on how you use the loan proceeds? The answer is no. There are, however, several points you should keep in mind before going on a spending spree.
How Do People Use Settlement Loans?
Data compiled by the Canadian Transportation Safety Board indicates that 160,000 car accidents occur in Canada annually. While many of these accidents are minor, others involve severe physical injuries. About 3,000 of them result in death. Those figures don’t take into account other types of accidents such as workplace falls, slips and falls on government-operated properties, or injuries that occur in other public places.
Using some of the money from your settlement loan for medical treatment is a good use of the loan. Loan proceeds can be used to cover any out of pocket expenses incurred for hospital stays, physical therapy, surgery, and other care needed to help you recover.
Covering basic living expenses while you are recuperating is also a common use of the funds, such as rent or mortgage payments and buying food.
The Benefits of Using Settlement Loan Funds Responsibly
In spite of a lack of restrictions on how you can use your settlement loan, it’s in your best interest to use it responsibly. Doing so provides you with several benefits, one of which is the peace of mind that you don’t fall behind on monthly expenses. When the bills are paid, you don’t fret about making ends meet and you can focus your energy on improving your health.
Securing a settlement loan won’t affect your credit rating, unlike other traditional loans. Unpaid medical bills, utility bills in arrears, and back rent can all have negative impacts on your credit report, and could affect your ability to obtain car loans or other financing in the future. Using your settlement loan to keep your financial obligations current helps you to avoid ruining your financial reputation.
If you have filed your personal injury claim, now is the time to call and discuss what a settlement loan can do for you. With the help of a reputable lender, you can concentrate more on healing and less on wondering how you’re going to pay your bills.