Benefits of Settlement Loans
A plaintiff in a pending lawsuit can enjoy many of the great benefits of a settlement loan. In the United States civil court system it’s typical for lawsuits to take months, if not years to reach a verdict, not including appeals in that time frame. With a settlement loan you can get up to 10% of your future settlement in advance; this is helpful to prevent plaintiffs from having to settle out of court and for a lower amount than a judge or jury would award. It’s typical for plaintiffs in a pending lawsuit to go through financial troubles, and this is especially true with injury and wrongful death lawsuits. A lawsuit settlement loan is an excellent way to prevent foreclosure, repossession and bankruptcy.
Attorneys have mixed opinions when it comes to their clients applying for settlement loans. Attorneys first hand can witness the financial troubles a plaintiff can go through and know a pre-settlement loan is an excellent way for them to receive the cash they need. Attorneys also know a settlement loan can prevent early settlement of their client’s pending case, which results in more money for them. Issues can arise with your attorney and a settlement loan if you have any contingency agreements or other types of agreements that can be broke due to a lawsuit loan. It’s a good idea to consult your attorney prior to applying for a settlement loan.
Settlement Loans Aren’t Really Loans
One thing you need to understand about a lawsuit pre-settlement loan is that it really isn’t a loan at all. It’s really considered a non-recourse debt, a non-recourse debt is basically a secured loan based on collateral. With a settlement loan your collateral is your pending lawsuit and the possible future monetary award. Unlike traditional loans you won’t need to have your credit checked, have a specific term of employment or a specific income level. The factor in deciding if you get a lawsuit loan is based on your lawsuit.
The simplest way to view a settlement loan is that the lender is buying interest into your pending lawsuit. They are investing money; in return if you win your case they’ll receive their initial investment back, plus interest and fees. The settlement loan advance amount is based on your probable awardable amount. This means you’ll be able to get up to 10% of what your lawsuit case is actually worth. Majority of lawsuit settlement loan providers will loan as little as $250 and as high as $100,000. However, it is possible to receive a settlement loan higher than $100,000 based on the case itself.
Settlement Loan Repayment Based of Case Results
The absolute best benefit of a settlement loan is the fact that if you don’t win your lawsuit you don’t have to pay back one dollar. This means you can use a pre-settlement lawsuit loan as a no-risk loan, unlike with a traditional loan or a credit card where you would still be required to make payments regardless of the cases outcome. So, if you were to lose your case and still have 50% of the money left from your settlement loan you are allowed to keep it all, nothing has to be returned to the lender.
This is one of the main reasons why settlement loan providers do heavy research into your pending lawsuit. You’ll never receive a lawsuit loan based on a frivolous lawsuit, and even some lawsuits with probable merit can get denied. You can expect your settlement loan provider to review all your case documents, speak with your attorney and review past case verdicts alike to yours. In return for a settlement loan’s no risk factor you can expect heavy research into your case.
A pre-settlement lawsuit loan provider is a much better alternative than a traditional bank loan or credit card. Since you have the no-risk factor with the settlement loan you don’t need to worry about re-payment after your case reaches a verdict. Unlike with a traditional bank loan or credit card where you would still be liable to make payments regardless of your lawsuits outcome. Be smart, if you need financial assistance during your pending lawsuit you should apply for a settlement loan.
Disadvantages of a Settlement Loan
As with any type of lending product you can expect a downside. With a lawsuit settlement loan you’ll find higher than normal monthly interest rates. These interest rates can range from 4% to 9% or even higher, it all depends on the amount of money and the success rate of your specific case type. Settlement loans also have fees added onto the original loaned amount; however some settlement loan providers don’t charge interest on these fees while others do. It’s a good idea to research all the fees and interests associated with the settlement loan provider you plan to use.
Plaintiffs also have a habit of taking out more than one pre-settlement lawsuit loan; this is due to them not getting enough money they’ll need from their original settlement loan. It’s a good idea to speak with your attorney and try to get a general idea of how much longer your case will take before deciding on an amount. This way you can take only what you need with your settlement loan. Don’t be greedy and try to get a huge sum that you don’t really need up front, remember settlement loans do charge interest and fees based on the amount of the settlement loan.
Summary of a Settlement Loan
Settlement loans are a great way for plaintiffs in need of financial assistance to obtain it without risk. Even if you take into account the interest and fees you’ll see that with the no risk factor it’s a beneficial option for a plaintiff in need of cash. Always do your research into the settlement loan company you plan to apply with; make sure you know the interest rates and fees up front. If you want, Legal Settlement Loans allows you to apply online for a settlement loan and we’ll broker a deal for you with a settlement loan provider.
