You know how much it can change your life if you’ve suffered an accident. Medical bills, lost income, and a mounting pile of paperwork can quickly take their toll on your financial health.
You may wonder if you can get personal injury funding to help you through this tough time. Understanding this process can be crucial to ensuring you have the best chance of getting the settlement you deserve.
What is a Pre-Settlement Loan?
When dealing with a lawsuit, they often face an enormous financial burden. Losing income, property damage, or medical expenses can create a financial mess that no one wants to meet.
Fortunately, there are ways to overcome this. In particular, pre-settlement funding can help a person receive cash while their case is pending.
Many accident victims cannot wait for their settlement, as it can take months or even years to get money for their losses. This situation is challenging for those who have lost a job because of their injuries or disabilities.
If you are in this position and need financial assistance, speaking with your attorney or financial advisor about pre-settlement funding is a good idea. The good news is that it is a much less risky option than a traditional loan and will not require you to pay back the money if your case fails.
A few different companies offer this type of personal injury legal funding. They may vary regarding the amount they are willing to advance and the fees they charge. Generally, most companies charge a simple interest rate rather than compounding interest.
How Does a Pre-Settlement Loan Work?
When you’ve been injured and are going through the legal process, it can be difficult to afford basic living expenses like rent, utilities, and food. You also may have medical bills and property damage to pay for while waiting for your case to settle or trial.
While lawsuits can be a great way to get compensation for your injuries, they’re often time-consuming and can take months or even years to complete. That’s why a Pre-settlement loan can be a helpful solution for many accident victims.
A Pre-settlement loan provides cash upfront in exchange for a portion of your expected future settlement or judgment. Once your lawsuit is settled, you’ll repay the funding company.
The type of interest your loan charges dramatically affects how much you’ll receive from any final settlement. Some loan companies charge a simple interest rate that only applies to the original amount. In contrast, others charge compounding interest which applies to the principal balance and any accrued interest.
A pre-settlement loan is a new financing option, and it’s essential to understand how it works before you apply for one. If you need clarification on whether it’s right for you, contact a lawyer or financial advisor to discuss your options.
Who Can Get a Pre-Settlement Loan?
If you’ve been injured in an accident, settling your claim or winning a judgment can be expensive. Sometimes, receiving a payout from the at-fault party can take years.
During this time, you may be unable to pay your bills or keep up with living expenses, mainly if you cannot work due to injuries. A pre-settlement loan can provide the financial assistance you need to cover your costs and protect you from a potentially devastating situation.
Pre-settlement funding companies assess your case based on many factors, including how likely you will win a settlement or judgment. They determine this by reviewing any medical records, police reports, or other documents that support your claim.
Once your application is approved, you’ll get a cash advance based on the strength of your case. You’ll typically receive between 10% and 20% of what the company expects your lawsuit to settle for.
While lawsuit advances are a popular option for plaintiffs who need more financial resources to wait until a settlement is awarded, it’s essential to consider the pros and cons of these loans before deciding whether or not they’re suitable for you. These advances often come with high-interest rates and fees that can cause significant financial harm.
Why Should I Get a Pre-Settlement Loan?
When you are involved in an accident and file a personal injury lawsuit, it can take months or even years to see a settlement. In the meantime, you may have medical bills and legal fees that must be paid.
A pre-settlement loan is a good idea if you need money for your living expenses while your case goes through the courts. It will give you time to negotiate a higher settlement and keep your bills from piling up.
It can also help you hold out for a larger settlement if the insurance company makes a low offer. You can then use your funding as leverage to get the higher compensation you deserve.
While it isn’t always easy to obtain a pre-settlement loan, it is an option that can be helpful for many accident victims. Knowing the pros and cons of a loan before applying is essential so you can make an informed decision.