6 Tips To Shop Effectively For Pre-Settlement Funding
When it comes to getting pre-settlement funding, it can be tempting to get it done as fast as possible. After all, you probably need money to make ends meet and pay medical bills.
But don’t be in a rush when looking for pre-settlement funding, and remember the following strategies to find the best financing during this challenging time.
Pre-Settlement Funding Overview
It may take a personal injury lawsuit months or years to settle. As the plaintiff, you may have rising medical expenses and debts that you can’t pay because you’re out of work.
Pre-settlement funding can provide some of your anticipated settlement so you can pay medical bills and cover living expenses. The money doesn’t need to be paid back if the case doesn’t settle or result in a favorable verdict.
Borrowing the money is expensive, but at Capital Now Funding, we only charge a flat fee. That way, you know exactly what you are paying up front.
Get the proper funding for your situation by remembering the following:
Talk To Your Attorney
Your personal injury attorney is your advocate and best source of advice during your case. If you are having financial difficulties waiting for a settlement, talk to your attorney right away.
They should be able to refer you to pre-settlement funding companies they’ve worked with before. It’s essential to approach a legitimate company, so you don’t get taken advantage of during a stressful time.
For example, it’s not unusual for ‘lawsuit loan’ companies to bury the fees and interest rates in pages of legalese in the contract. This is because many injured plaintiffs aren’t in the mood to read a long agreement.
However, it’s essential to know what borrowing the money will cost. Depending on how long the case takes, with some companies it is not uncommon to pay over 100% interest on the borrowed funds.
Hopefully, your attorney is familiar with these companies and can direct you to a firm that will treat you fairly.
Think About How Long The Case Will Take
Some car accident cases could settle in a few weeks but this isn't likely. Typically it will take months to even years to settle, especially if the case goes to trial.
For example, if someone hit you from behind while you waited at a red light, it’s usually clear the driver in the rear is liable for your injuries. This case may be settled relatively quickly by the insurance company.
On the other hand, a medical malpractice case could take years to settle.
Before you agree to take a lawsuit loan, review all fees and interest rates with your lawyer.
Be especially wary of interest rates that rise the longer it takes the case to settle. It’s better to find a company that charges you a flat fee for borrowing the funds instead of rates that rise as time passes.
Your Credit Doesn’t Matter
One benefit of pre-settlement funding is that your credit score is irrelevant. Most loans require decent credit to qualify, but the only thing that matters here is how likely your case is to end in a favorable settlement.
The pre-settlement lender will talk to your attorney about the case and ask for relevant documents to judge what the case may be worth. They will review your medical records, police report, and other materials to make a lending decision.
Borrow As Little As Possible
No matter how good the pre-settlement funding company is, borrowing the money will be costly.
Review your monthly expenses carefully and determine the minimum amount you need to make ends meet in the anticipated time it takes to settle the lawsuit.
You want to be sure you don’t pay more than necessary. Also, consider all other avenues besides pre-settlement funding, including personal loans from family, borrowing temporarily from retirement accounts, and tapping home equity.
Expect About 10-20% Of The Case Value
How much a pre-settlement lending company will loan you depends on how strong the case is and what it may be worth. If the company thinks you will probably get a reasonable settlement, they may offer pre-settlement funding.
You will typically get about 10-20% of the lawsuit’s likely value. While the percentage depends on the lender’s perception of the case value, there are other factors, too.
For example, the company will review what the lawsuit’s expenses are, including legal fees, court costs, and other litigation expenses. They also will want to know the contingency fee your attorney charges. This is the compensation the attorney receives as a percentage of your settlement or verdict award. Also don't expect to receive the full 10%-20% upfront. Often times lawsuit loan companies will start with a smaller amount and work their way up to higher amounts over time.
Look For Hidden Costs
There are legitimate lenders available that offer fair, up front pricing, but you have to look for them. Some companies charge varying interest rates and up to $400 in application fees.
Loan interest could compound every month or at a higher rate that you thought. Some shady companies may charge you two or three times more than you borrowed.
What Happens If You Lose The Case?
The contract with the pre-settlement funding company will contain everything about the interest rate, fees, and terms of repayment. Usually, you do not have to repay the money loaned unless the case results in a settlement.
However, you should review the contract with your attorney. It’s especially important to ensure that you won’t owe anything if the settlement isn’t enough to repay what you borrowed.
How Long To Get Pre-Settlement Funding?
How long it takes from application to receiving funds depends on the case and company. Some critical factors are:
- How responsive your attorney is: Tell your lawyer that a pre-settlement funding company will contact them so they respond as soon as possible.
- How complex the case is: A rear-end crash case is usually simpler than a medical misdiagnosis lawsuit.
- Prior loans: If you received other settlement advances, they need to be paid off before you receive cash.
Need Cash Today? Contact Capital Now Funding
Capital Now Funding understands that injured plaintiffs need money as soon as possible to make ends meet. Capital Now Funding offers a simple, up front fee for its services, with no hidden fees or interest rates.
Contact Capital Now Funding today to help you with your current situation.