If you’ve recently been in a car accident, you’ll likely be suffering from your injuries, the psychological trauma of the accident, and mounting expenses (as you’re unable to work). It’s not an enviable position, so it only makes matters worse when you find out that it could take months before you see compensation for your injuries and property damage.

Why do car accident settlements take so long? And can you get a loan to cover your expenses in the meantime?

The Car Accident Settlement Process

Sometimes, car accident settlements are reached quickly, out of court, but even in these circumstances, it can take a while to get your money. That’s because insurance companies intentionally delay the process as much as possible to maximize their retention of funds; they get to keep the money longer and apply pressure to get you to lower your demands. There are also several stages of the internal approval process, which can ultimately take weeks, or even months, to complete.

That’s assuming the settlement goes well. Countless factors could delay your car accident settlement in a variety of different ways. For example, if the details of the case are unclear, it could take lawyers and investigators weeks to figure out what exactly happened. The negotiation process could unfold slowly as well. And if the case goes to trial, you could be stuck waiting even longer. The good news is, court cases are so complex and expensive that most car accident cases are settled out of court.

Can You Take Out a Loan on a Car Accident Settlement?

It’s interesting to learn the mechanics of why your car accident settlement is taking forever – but that doesn’t help you manage your personal finances.

So what about a loan? Can you go to a bank and get a loan based on your forthcoming settlement?

The answer is “maybe.” But there are a number of problems associated with conventional bank loans:

• Qualification is hard. Banks don’t see your prospective settlement as earned or acquired money. They see it as speculative and will likely not issue you a loan based on that forthcoming money, no matter how promising your case seems to be. Because of that, you’ll be required to qualify for the loan through the “normal” process. That usually means establishing a high credit score, limiting your debts, and proving that you can repay the loan. If you’re already in a tough financial position, this may be borderline impossible.
• The application process is messy. For small loans, the application process is usually simpler and faster. But if you’re requesting tens of thousands of dollars or more, you can expect a lot more scrutiny. Banks don’t want to lend vast amounts of money to just anyone. You’ll need to provide tons of details on your personal finances and your financial history just for a chance at getting the loan.
• Interest rates are high. Even if you do qualify, most bank loans are associated with a relatively high interest rate, applied to your principal and compounding consistently. Depending on how much you borrow, you will owe back additional money every month due to interest.  If your case hasn't settled, you may not have the money to make the installment payments.
• Terms and conditions can be stifling. On top of that, the terms and conditions of regular bank loans tend to be stifling. If you don’t make the minimum payment, or if you’re late with a payment, you might owe a fee. You might not be able to pay back the loan in full without paying a fee. You might also face strict repayment conditions that make it harder to pay the loan back – and if you fail to pay the loan back, the bank may seize your property to cover the costs.

The Basics of Settlement Loans

Fortunately, there’s a powerful alternative to getting a bank loan: a settlement loan. Settlement loans aren’t really “loans” – they’re more like an advance. You’ll get an immediately available sum of money based on your specific forthcoming car accident settlement. If you don’t win a settlement, you’ll owe nothing. If you do win a settlement, you’ll owe what you borrowed plus a fee (assuming you find the right settlement loan provider).

Best of all, it’s quick and easy to qualify. You’ll need to provide the details of your case, and the contact information for your lawyer, but you won’t need to provide any personal details (not even your credit score).

Tips for Finding the Best Settlement Loan for Your Car Accident

There are a lot of settlement loan providers out there, so how can you find the best fit for you?

• Talk to your lawyer. Start by having a conversation with your lawyer. They may have a personal recommendation for you, or may have some advice on how to start your search.
• Shop around. Look for information from multiple settlement loan companies. Different organizations offer different terms, conditions, and fees, so make sure you’re comparing apples to apples.
• Look for a flat fee. Interest rates are common in settlement loans, but they can be unforgiving. Instead, look for a provider that offers settlement loans for a flat fee.
• Check terms and conditions carefully. Always be sure to read the terms and conditions – and make sure your loan is non-recourse.
• Have a conversation. When you’ve done your homework, you’ll be ready for the next step; talk to a settlement loan provider about the options available for you, or fill out an application to get started.

Were you recently in a car accident? Are you waiting on a settlement to relieve your financial woes? Get your settlement early with a settlement advance, also known as pre-settlement funding. At Capital Now Funding, you won't owe any recurring interest; instead, you'll pay only a small fee. Apply now to see your offer today!