Reasons Loan Requests Get Denied
You made the choice to go and take a loan on your settlement and once you’ve done some research, you’ve found a company that you want to work with. They have you read through the paperwork and fill everything out before having you wait for your day in court. Once that day comes, you go in front of the judge and anticipate the approval of your settlement loan only to hear the words “Settlement Loan Transaction Denied.”
That’s not the result you were expecting to hear. Confused, you wind up wondering why your loan wasn’t approved. Oftentimes, it can be deemed unnecessary. Other times, it can be the result of a bigger problem. Let’s take a look at some of the more common reasons why settlement loans get denied.
Why? Why? Why?
So the judge didn’t approve your loan and you’re lost trying to figure out why that happened. The denial could be the result of a number of different factors. You’ll want to visit each so you can better understand why your settlement loan could be denied.
Some reasons may include:
- It’s Unnecessary – When a judge looks at settlement loans, they want to know why the loan is being taken and what reason was given as to why it’s needed. If it’s for the purchase of a new car and the old one still works, they will probably see it as an unnecessary purchase and deny the loan. The same goes with the purchase of a home or other big ticket items. If it’s to help with debt, they will look at all of your options to see if it is feasible for you to take care of the debt without borrowing against your settlement.
- The Company You’ve Chosen to Represent You – One thing that some don’t realize is that the company that is handling your settlement loan gets paid for doing it. Or, you realize they get paid but don’t understand how much money is involved. A judge will look at everything and if they feel that the company is going to be paid more than a fair amount, they will deny the sale on that grounds alone. A judge is there to make sure all parties are taken care of fairly. It’s your money and they want to see you get the biggest amount available, not the company representing you.
- Bigger Problem – If the goal is to get a structured settlement loan to take care of debt, a judge will look at your finances. If they feel you can take care of the debt with a bit of extra work and not have to use your settlement, they’ll deny the loan. The reason this would happen is if you took a loan out because you didn’t have a job, they would look at it as this is a means of stability. If they grant you a loan and in that period of time, you’re still unable to find a job, you would be in a predicament because the payments you would be receiving would be less than what you received previously.
- Paperwork – Even if you do the paperwork and think everything is done, your request can be denied if the paperwork isn’t filled out correctly or filed properly. You’ll waste your time and the company representing you will still need to be paid in most cases.
Being denied a settlement loan isn’t the worst thing that could happen, but these reasons are the most common examples of why many requests get denied. One thing that this can do to improve your chances of acceptance is to know what a judge will and will not tolerate. After reading this article, you’ll be better equipped to deal with the outcome either way.Call Us Today
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