>Outrageous Structured Settlement Discount Rates

Outrageous Structured Settlement Discount Rates
By Andrew Cravenho

Selling a structured settlement can be great on many levels. Including, freeing up cash to pay for college, buying a home, or paying off debt. But, the question is, "Why do factoring companies take such a large chunk of the structured settlement or annuity?" The national average of 19.2% for a discount rate is just an absurd figure. Yes, there is a risk factor involved, taking on payments from a company that may not be around in 20 years.

The national average taken from a 2004 California Attorney's General report was 19.2%. If a structured settlement is going to be sold for a lump sum of money, the interest rates have to be much lower. A reasonable rate would be in the range of 10- 13%. With this rate both the factoring and the structured settlement owner would come out very happy.

Lets take a $200,000 structured settlement that is getting paid out evenly over the next 10 years. That is $2,000 per month. With the discount rate of 19.2% over the next 10 years, equals around $112,000 to the structured settlement owner. The factoring company is taking 44% of the $200,000.

With the discount rate of around 12%, the structured settlement owner would get a payout of around $140,000, that is almost $30,000 higher than the national average.

The factoring industry is heading this way in the future. It may take a few years, and a few more stunning reports, but the factoring industry is needed in many ways.

There are more and more structured settlement factoring companies offering great discount rates as low as 8%. These companies are the future of the industry.

Get cash for a Structured Settlement. Each client is given four quotes and bids for their structured settlement, annuity, and lottery winnings. Feel free to contact us with any questions if you need to Sell a Structured Settlement.

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