Sellers of structured settlements have been asking why are discount rates for their cases so high when the Federally set interest rate is so low.
The answer to this is basic economics:
1. The Fed rate is low because there is reduced market activity and the Fed is trying to stimulate such activity.
2. Demand for money is high but lending supply is low (this is what they mean when they say money is tight.)
3. While the Fed rate is low, try to get a mortgage or loan, or worse yet a credit card interest rate that is in the single digits.
At Genex Capital we compete with the credit markets for our money. We must offer our investors a reasonable rate of return that is competitive in the industry.
As such, the discount rate that we offer our sellers is based on a number of complex variables.
We still are able to offer the best rates in the business because we have low overhead and because we operate on a volume basis so our margins per transaction are low.
Please contact one of our Customer Service Experts at 800-348-3098 FREE and they will be happy to discuss the details of your particular case.