Once you file a lawsuit, the first concerns you face are whether you have the time and money to see it through.
If you are someone from a poor financial standing, waiting for the settlement might be difficult for you. Fortunately, you do not have to worry about this since funding corporations are willing to give you pre-settlement advances.
What are pre-settlement loans anyway?
Lawsuit lending companies provide pre-settlement loans to fund a lawsuit. Fundamentally, they provide funding against cases that are still not settled yet. Personal injury victims typically receive these. These are not your conventional loans since you do not have to pay back the amount unless and until you win or settle the case.
Read on to learn the qualifications you need for acquiring a pre-settlement advance and the procedure to acquire the same.
How To Get These Pre-Settlement Advances?
You can receive pre-settlement advances from lawsuit lending companies, provided that your attorney provides their consent. There are many lawsuit companies out there that you can select. Express legal funding service is one such company that gives accident loans to support any outstanding legal case.
It takes these companies at least one day to take stock of your case, talk to your lawyer, and finally approve your loan. The process of applying for such loans are as follows:
1. Apply for a Lawsuit Advance
The first step to getting a pre-settlement loan is to file a lawsuit. This involves getting an experienced lawyer to file your case. After which, with the consent of your lawyer, you can apply for a funding request.
Keep in mind that your attorney will get a percentage out of it once the settlement money rolls in. And also have to pay the amount you borrowed with the interest rate to the lawsuit loan companies.
2. Get Qualified for Advances
Once you have filed the cash pre-settlement funding, the next step is to get qualified by them. Funding companies will then have to accept to assess your case. This assessment will be the basis if they can give you a loan. And if they have agreed to provide you with a loan, they further decide how much they can provide you and what interest rates.
Your credit score or employment status are not considered when considering if you are eligible. You do not have to make monthly payments on interests. You will be required to pay if and only you win or settle the case.
3. Submit Legal Case Documents
Once the funding corporation has decided to assess your case, you must submit legal documents supporting your claim.
Suppose you are filing for accident settlement loans, then you can start by submitting the following documents.
- Police reports
- ER reports
- Surgery reports
- Expert consultation reports etc
4. Review Your Case
After submitting the related documents, you must wait for one or two days while the company assesses your case.
The funding companies will assess the strengths of your case, insurance amount, liabilities posed, and then conclude. The stronger your case is, the higher the chance of securing a loan.
5. Analyze the Funding Agreement
Once the company arrives at a decision, they will communicate with you.
You will receive a pre-settlement loan agreement if your loan request is approved. Make sure to read the terms and conditions thoroughly with your lawyer present.
You can find the estimated interest rates in this agreement. Some companies have interest rates as high as 50%, but some reputed companies offer less than 1-3%. Therefore make sure to do your homework before selecting a funding corporation.
Once you have gone through the agreement and accepted the conditions, you will be paid the cash advance. Some reputed companies will send you the payment within the same day via electronic deposit. In comparison, other companies might take a bit longer to send you the money.
What Happens Once Your Case Reaches Settlement?
Pre-settlement fundings are essentially funding companies buying a part of your settlement money.
Once your case settles, the money will be used to pay for your court fees, lawyer fees, and the cost of litigation fees plus interest. Whatever remains after paying for all these fees will be given to you.
8 Things To Consider Before Getting Pre-Settlement Loans
A few things need to be considered before availing of pre-settlement loans. Some of them are:
- Some client legal funding companies have compounding interest rates. Make sure to stay away from these types of funding corporations. You can check the legal funding reviews of the companies to find out if they have compounding interest rates.
- Some companies might use your low credit score to charge a higher interest rate. You have to stay away from these types of companies.
- Make sure to select companies that provide interest rates on a case-by-case basis. They will evaluate based on your case merit, making the offers more reasonable.
- Obtaining up to 10% of the funds will allow you to go home with a considerable amount of money once the case settles. Considering the high-interest rates these loans have, obtaining more than 20% of funds means you might lose out on your settlement money.
- Talk to your lawyer to determine how long it would take for your case to conclude. If it is going to take a long time, you have to consider the interest rates in the meantime.
- Select companies that are upfront about their loan policies. Transparency between the company and you are vital.
- Always make sure to ask your lawyers and funding corporations your queries before signing the agreement. This gives you peace of mind.
- Use resources such as pre-settlement loan calculators to determine how much you would have to pay once the settlement money comes in. This is usually calculated considering the amount borrowed, the interest rates, and the approximate time it takes for the case to close.
Before getting a pre-settlement advance, we encourage you to consider all your options. Make sure to borrow only the money you require. Extravagant borrowings might lead you to lose out on a lot of your settlement money. Keep all the said points in mind and make informed decisions.
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Dan has hands-on experience in digital marketing since 2007. He has been building teams and coaching others to foster innovation and solve real-time problems. Dan also enjoys photography and traveling.