About Lawsuit Loans
A lawsuit loan, also known as a settlement loan, lawsuit cash advance, lawsuit settlement loan or lawsuit funding is a non-recourse loan that a plaintiff of a lawsuit can obtain. The amount of money that a plaintiff is able to borrow from a lender depends on factors such as probable monetary award and chance of winning their civil suit. There are many different benefits of a lawsuit loan, however many organizations and political figures frown upon lawsuit settlement loans. This is due to the high cost of lawsuit loans and the lack of oversight and regulation regarding them. Ultimately the plaintiff needs to weigh the pros and cons of this type of loan and see if it’s right for them.
People who can benefit the most from a lawsuit loan are people who are dealing with civil suits related to disability and wrongful death. This is because they are unable to work or lost a major source of income and it becomes hard to financially support their households. It’s recommended that if you do decide to get a loan on your lawsuit that you only take what you need. Talk with your attorney and try to get an idea how long your case will take. Then, ask the lender about their fees and interest rates and you’ll be able to get an idea how much it will cost. If you still have more questions after reading the information below feel free to contact us or review our lawsuit loan frequently asked questions archive.
How Does a Lawsuit Loan Work?
The concept of a lawsuit loan is quite simple, a plaintiff in a lawsuit obtains money from a lender who charges an interest rate and fees. The benefit to the plaintiff is they are able to access cash before their case is settled and aren’t required to pay back the loan if they lose their case. The benefit to the lender is they earn a nominal interest rate plus fees during the loan period. The loan period starts when you receive the money and ends when the lender is paid back the loaned amount, plus interest and fees.
Your attorney will need to work with you and provide your case information to the lender. Many attorneys don’t want to deal with lawsuit loans but by law if you allow the information to be released the attorney must comply. The way the lender is paid back is quite simple, they place a lien on the case itself, just like an insurance company or creditor. The lien usually must be payable right after your attorneys fees and prior to you and other lien holders. We suggest you learn more about the lawsuit loan process before you attempt to obtain one.
Is a Lawsuit Loan a Good Idea?
This is the age old question in the lawsuit settlement loan industry and sadly if you ask any lender they’ll always tell you yes. Your situation really depends if the costs of a lawsuit loan are worth getting your money prior to a settlement. Remember, your interest with a lawsuit loan is compounded monthly along with any initial fees charged by the lender. Most lenders will tell you not to work with any other lawsuit loan providers while working with them. We recommend that you contact several companies so you can find the best competitive rate and the lowest fees.
If you really need the cash now to support your family, prevent foreclosure or pay medical bills then it might be in your best interest to obtain a lawsuit settlement loan. You can also try alternate means like asking family members or friends to borrow money while your lawsuit is working itself out. If you do decide to go with a lawsuit loan make sure you only borrow what you need. The worst thing you can do is take the full offer from the lender considering you must pay compounding monthly interest on the entire borrowed balance. You should learn more about the lawsuit loan process before you make the decision if this is right for you.
