Waiting for compensation in a lawsuit settlement can take a toll on your finances. It could affect your emotions and your lifestyle as well. This is because you may be out of your pocket for a while and not settle your bills on time.
The good news is that you can take a lawsuit loan to cover the cost. A lawsuit loan refers to funds you can borrow to settle an impending lawsuit settlement. It is also known as a pre-settlement loan.
A lawsuit loan provider lends advances on settlement money. This is so that complainants can pay their bills while pursuing the lawsuit. In addition, it will help their finances remain afloat before they receive compensation.
You can borrow lawsuit loans to cover medical expenses and daily living expenses.
How to Get a Lawsuit Loan
Lawsuit loans are easy to get. The loan company determines how much you can borrow. This will depend on how much lawsuit settlement you are expecting.
To get a loan from lawsuit loan companies like US Claims, Thrivest Link, Provident Lawsuit Loans, and so on, you only need to get on a call or apply online on their websites. However, you will have to provide details about your case and your attorney’s contact information.
The company will review your case first and determine whether to offer you the loan. If the company approves the loan, you will sign a contract and receive the money soon after.
How Does It Work?
The loan is usually deducted from the settlement funds. This is after all other expenses are taken care of.
You must pay certain expenses when you receive a lawsuit or a settlement in court. Some of these expenses include:
The Attorneys’ Fees
This applies to personal injury cases. In most cases, the fees amount to one-third to half of the settlement you receive.
Expenses of Litigation
These expenses include process fees, copy costs, and court costs. All of these are costs that you incur at different points while processing your case.
These fees cover any medical services for injury caused by the defendant in the case. It is to pay the doctors, hospitals, or other medical providers involved.
When you settle all these expenses, the lawsuit lender receives payment from whatever remains.
Is a Lawsuit Good for You?
You may be in desperate need of money during the lawsuit. Lawsuits are also risky and can swing either way. Unfortunately, this may tempt you to settle for less compensation than you deserve.
A lawsuit loan helps to lessen that pressure so you may be able to fight for a better settlement.
There are many fast and easy settlement lawsuit loans available. However, this does not mean you should take loans at every chance. If you are unsure whether a lawsuit loan is in your best interest, then keep reading this article.
Below are factors you should look out for before taking a lawsuit loan.
No Limits on Usage
Some loan companies dictate how you should use the loan they offer you. It would be best if you didn’t use such companies.
Unforeseen circumstances may come up while you await compensation. A pre-settlement loan should be able to help you sort it out.
If the company limits your usage of the loan, then it might not be a good option.
Choose a company that will offer a loan even if you don’t have a great credit score. Most loan providers consider your credit history first.
Go for a company that does not need to verify your income. This is because a lawsuit should be enough reason to be eligible for the loan.
Sometimes, the settlement may take a while, and your bills will pile up. If this happens, you may need to borrow some more money from another lender.
Some lawsuit companies may stop this from happening. If this is the case, then the loan may not be in your best interest. Loans with no restrictions are better because they will let you sort out more emergencies.
Some lawsuit loan providers may ask for collateral, while others may not. Of course, it is advisable to go with one that doesn’t require that. This will save you from emotional and financial strain if the settlement does not work out.
They Are Impersonal Loans
Personal loans can come with expensive repayments. Go for pre-settlement lawsuit loans that operate differently.
Choose loan companies that don’t ask for repayments while you’re waiting to settle your case. The company should wait to receive the money from your attorney, not your bank account.
There are never any guarantees that the settlement will go as planned. Sometimes, the settlement may not come through. In some cases, it may not be the amount you expected.
If you lose the lawsuit, you won’t have to repay the lawsuit loan. Consider taking the loan if the loan company offers this policy. This way, you are minimizing the risks and maximizing the benefits you can get from the loan.
How to Choose a Lawsuit Loan Provider
Here are some tips you will find useful when picking a provider.
Seek Legal Advice
The first thing to do before taking a lawsuit loan is to talk to your attorney. If you decide to take a loan, let your attorney provide options.
Your attorney’s recommendations may be better because of past experiences working with several companies.
Your attorney will also help you decide if the loan is in your best interest. In some cases, the legal professional may even be able to negotiate terms with lenders.
Look Out for Interest Rates
Interest rates are not the only thing to look out for, but they are worth examining. You can find the interest rates of many companies on their websites.
If you have any misunderstanding about a company’s interest rate, you can contact them for clarification. Ensure that you clearly understand the rates before you proceed with your application.
It is important to confirm your payment arrangement before signing the contract. This ensures that you won’t be paying more than your settlement amount. In addition, some arrangements may allow you to not repay the loan if you lose your case.
Although most lawsuit loan companies offer such arrangements, that does not mean all do. This is why you should confirm the arrangement ahead of time.
It is important to consider all these factors and talk to your attorney first. Once you do these, you can rest sure that you’re making the best financial decision for your situation.