Students loans, medical bills, auto and home loans – it’s no secret that Americans are drowning in debt. With around 40% of American households spending more than they earn, there’s no chance to save money, pay off debts, or invest in a college education or business. For most people, there are very few ways to reduce debt. But if you have been awarded a settlement in a lawsuit, or have won the lottery, you can sell you annuity and get cash for lottery winnings.
Five things you can do with a lump sum instead of an annuity
On average, the American adult owes $11,244 in student loans, $8,163 in autos loans, and $70,322 for their home mortgage. Getting cash for lottery winnings can give you the money you need to pay off your debt, or to fulfill your dreams: invest your money for financial security, buy a house or car, take a round the world cruise, pay for college or start a business.
1. Pay off your debts
Getting out of debt is a priority for most people, but it isn’t easy. In 2014, about 35% of the U.S. population, or 64 million people reported that they had trouble paying bills or had medical debts to pay off. One in five or 20% of all low credit reports are due to unpaid medical bills. As of February 2015, there were on average 3,422 bankruptcies being filed daily across the country.
2. Buy a house
The average cost of a new house in 2010 was $272,900. Most people need to be approved for mortgages to be able to pay for a new home. Even so, most mortgage lenders require home buyers to pay 5, 10, or 20% of the sale price as cash down as a condition of the loan.
A home is a basic need, but buying a home is out of reach for most people. If you exchanged your annuity for a lump sum, you would be able to buy a home or make a down payment and begin building equity.
3. Buy a car
In the U.S. the average cost, known as the average transaction price (ATP), for cars and light vehicles was estimated to be $33,993 in January 2015. Most people don’t have that kind of money lying around, and need bank loans to finance their purchase. Between 2104 and 2015, outstanding auto loans have increased from $866.44 billion to $943.76 billion. With cash for lottery winnings, you can buy a car with money down and save on the interest you would pay over the term of the car loan.
4. Pay for college
A college education is one of the most important steps an individual can take to improve his or her career prospects and earning power. But it remains out of reach for many people. The College Board reports that at public colleges, average in-state tuition and fees were $9,139 for the 2014?2015 school year. At private colleges, tuition was $31,231.
For many people, a college education is only possible with the help of student loans, which burden them with lifelong debt by the time they graduate. Between 2014 and 2015, the total amount of outstanding student debt has risen from $1.21 trillion to $1.3 trillion. But if you have won the lottery, by getting cash for lottery winnings, you can pay for college without incurring massive debt.
5. Start a business
If you’ve always had a dream to start your own business – a florist shop or auto garage or bake shop – that’s a good reason to sell your annuity for a lump sum. Small business loans are either very difficulty to obtain or come with very high rates of interest, or both. The average cost of starting a business, according to the Kauffmann Foundation, is approximately $30,000. By selling your annuity, you can invest your money in the business you’ve always dreamed of opening.
By getting cash for lottery winnings, you can invest your money in your financial security and future plans.