A personal injury lawsuit is designed to give you compensation for your injuries from an accident. Filing a personal injury lawsuit could get you the compensation you deserve for medical bills, lost earnings, and pain and suffering.
However, the challenge with lawsuits for many accident victims is it may take months or years to receive your compensation from a settlement or verdict. If it takes a year for your case to settle and you cannot work, how do you pay for your mortgage, car payment, utilities, medical treatments, etc.?
That is where a lawsuit loan can help you. Legal funding companies provide financial options for you to get through this challenging situation. Below is more information about how a lawsuit loan or pre-settlement funding can help you.
How A Lawsuit Loan Works
Funding from a lawsuit loan offers you access to part of your potential settlement before the case concludes. After you get your lawsuit settlement, it pays all related costs, such as your attorney fees and the company you choose to provide your lawsuit loan. The balance of your settlement funds goes to you.
When you are looking at lawsuit loan companies, some things you should look for include the following:
• Free Application And Fast Approval
The company should review your case within a day or two and approve you if they think you are likely to receive a fair settlement.
• Money Should Be Available To You Within 48 Hours
Most personal injury victims need cash fast, and you should not need to wait long for your loan to fund.
• The Interest Rate You Pay Should Be Clearly Stated In Your Loan Paperwork
Beware of any company that does not provide simple language for your interest rate, how much you are borrowing, and what you will pay back.
• Some Companies Offer A Discount If Your Case Resolves In A Year Or Less
• The Funds Should Be Non-Recourse
This means if you lose your case, you keep all the money and owe the company nothing.
• No Credit Check
Lawsuit loans are based on your case’s strength, not your credit.
• The Company Should Encourage You To Discuss Their Program With Your Attorney
Never sign any lawsuit loan paperwork without reviewing it with your injury attorney. Any company that pressures you to sign fast without consulting your attorney is not looking out for you.
What To Watch For With Lawsuit Loans
Many lawsuit loan organizations are legitimate companies you can trust. But watch out if you see any of these red flags below.
Some legal funding firms charge substantial fees upfront. Beware of a company charging 10% or more of the advance upfront. Some may charge 30% or 40%. The fees accrue interest and can raise the amount of the loan quickly. Many fair companies charge 5% or less upfront.
If you can, avoid compounding interest contracts. Compound interest means you pay interest on top of interest. So, you will pay more for your loan over the months. Many companies charge simple interest for a personal injury lawsuit, which is preferable.
Some lawsuit loan companies are brokers. Always inquire if the company is a direct lender or broker. Some brokers are fine and sound professionals. But you pay a commission for their services, often with interest. You will pay less in fees and interest with a direct lending company.
If you are waiting for your personal injury case to settle and need money now, a lawsuit loan can be an attractive option. Just do your homework and research the company carefully. Plus, always review the deal with your attorney!
