If you’re receiving payments from a structured settlement—whether from a personal injury lawsuit, wrongful death claim, or worker’s compensation—you might be wondering if you can access that money now instead of waiting for monthly installments. That’s where structured settlement loans come in.
In 2025, more Americans are exploring structured settlement loan options due to rising living costs, medical emergencies, and financial uncertainty. But how do these loans actually work? Are they really “loans”? And what should you look out for before signing any paperwork?
Let’s break it down.
What is a structured settlement loan?
Technically speaking, you can’t take a traditional loan against a structured settlement. That’s because federal and state laws restrict the direct use of settlements as collateral.
Instead, most “structured settlement loans” involve selling all or part of your future payments to a factoring company in exchange for a lump sum today.
According to the National Association of Settlement Purchasers (NASP):
“What people call a loan is really an asset purchase. You are transferring the rights to future payments in exchange for immediate cash.”
This means you’re not taking on debt—you’re giving up a portion of what you’re owed in the future.
How does it work in 2025?
The process has become more regulated over the years to protect consumers. In 2025, most U.S. states require a court review and approval before a structured settlement sale is finalized.
You’ll typically follow these steps:
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Get a quote from a settlement funding company.
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Submit paperwork, including the settlement agreement.
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Attend a court hearing where a judge will determine if the sale is in your best interest.
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If approved, receive a lump sum payout.
Financial expert Marla Jennings, from the Florida-based firm FairCashNow, explains:
“It’s not a 24-hour turnaround. We’re seeing approval times of 30 to 45 days in 2025, especially with increased scrutiny around sales involving minors or medical settlements.”
Real-life examples
Many Americans use structured settlement loans to deal with sudden expenses, like medical bills or eviction notices. In Los Angeles, 32-year-old Angela T. sold part of her $800/month worker’s compensation settlement to pay for emergency surgery.
“I had no other options,” Angela said. “I sold three years’ worth of payments and got $18,000 upfront. It helped me survive.”
But not everyone walks away satisfied. In Georgia, 51-year-old Troy S. said he felt pressured into a deal he didn’t fully understand.
“They made it sound like a loan. I didn’t know I was giving up five years of payments for half the value,” Troy said.
This is why transparency and legal advice are more important than ever in 2025.
What to watch out for
If you’re considering this option, beware of misleading marketing. Companies may advertise phrases like “instant cash loans” or “borrow against your settlement,” which can confuse consumers.
The Consumer Financial Protection Bureau (CFPB) warns:
“No legitimate lender will offer a traditional loan using structured settlement payments as collateral. Any such arrangement is likely a sale disguised as a loan.”
Here are some red flags:
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High discount rates: Some companies pay only 50–70 cents on the dollar.
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Lack of court approval: Skipping this step is not only illegal in most states but dangerous.
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Aggressive tactics: Be wary of pushy reps promising fast money without explaining the long-term impact.
Your options in 2025
Before selling your future payments, consider other alternatives.
Financial counselor Terrence Moore, based in Chicago, suggests:
“Explore traditional personal loans, ask about government assistance, or talk to a nonprofit credit counselor first. Structured settlement funding should be a last resort.”
That said, if you truly need the funds and understand what you’re giving up, a structured settlement loan—technically a sale—may provide needed relief.
In 2025, there are now more reputable players in the market. NASP provides a list of member companies who follow ethical guidelines. Legal assistance is also widely available online.
Final thoughts
Structured settlement loans in 2025 remain a controversial yet sometimes necessary option. They offer access to fast cash, but at a cost: your future income.
Before making a decision, ask yourself:
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Do I fully understand the terms?
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Have I spoken to a financial advisor or attorney?
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Is this my only option?
Getting the cash now may solve today’s problem—but it could create new ones down the road.