(George from Indiana) Do most banks and credit unions front negotiated settlement pay offs with a substantial down payment or are they not looking to attract this kind of business? In other words are the ones that will do a settlement loan hard to find?Dear George:
I think that you will be hard pressed to find any legitimate and reputable institution willing to loan for settlement pay offs. As a matter of fact, you are going to have a hard time convincing lenders to fund any type of risky loan given the difficult economic times that we are in.
Keep in mind that as you move away from traditional lenders, the risks that you take as a borrower tend to increase. Lesser known alternative lenders that might be willing to participate in this type of lending will likely impose unfavorable terms.
If you do succeed in getting a loan to use toward settling defaulted debts, understand that it will likely require collateral to protect the lender. If you defaulted on the original debts, what is to stop you from defaulting on their loan too? That will be their primary concern.
Of course, debt settlement companies claim to be able to offer services once you have accumulated enough of a balance through monthly payments into an account. Still, you have to ask yourself why they need to take such high fees in the beginning when they have yet to do anything on your behalf. If you venture into this type of arrangement, first check to see what are the pros and cons of debt settlement.
Tags: debt settlement loans, settlement loans
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