How Can I Get a Loan From a Lawsuit Settlement?
If you were the victim of a personal injury, or if you're currently embroiled in a lawsuit regarding some similar matter, you may be eagerly awaiting a lawsuit settlement. Your lawyer may feel confident that you're going to win an ample sum of money, covering all the expenses you incurred because of the incident and even compensating you for your pain and suffering.
There's just one problem. It could be weeks, months, or years before you are awarded the settlement money directly. While you're waiting, your expenses are mounting. You may have significant medical expenses on top of your daily expenses, including your mortgage payment and your utility bills, not to mention groceries. You're out of work because of your injury, your finances might be even more complicated.
So can you take out a loan based on your lawsuit settlement to close the financial gap?
The Problems With Conventional Loans
One option is to try and take out a personal loan. If you walk into any financial institution, you can begin a conversation about your qualifications as a borrower and the amount of money that you can take out. Unfortunately, there are many problems with this approach.
For starters, you may not necessarily qualify for a loan. Most lenders only provide funds to borrowers who prove themselves to be accredited; in simple terms, that usually means you need to have a great credit score and/or a reliable stream of income. If you don't have that, you may be forced to put something up as collateral, jeopardizing some of your most important assets.
On top of that, you're probably going to owe interest on that loan. Over time, you're gradually going to own more and more, ultimately paying back far more than you originally borrowed. If you don't keep up with your payments, you could end up in significant debt.
Why Lawsuit Settlement Loans Are Valuable
Instead of taking out a conventional loan, you could choose to take out a settlement loan. But how is the settlement loan different and why is it so valuable?
Lawsuit settlement loans go by many other names, including settlement advances and pre-settlement funding. But whatever you call it, it tends to follow the same structure. It's more like an advance than a loan; you'll be granted a sum of money based on the settlement you'll likely be awarded in the future. Then, when your settlement does arrive, you'll pay back the money plus a small additional fee for the service.
That leads to a lot of benefits:
- Immediate cash. You'll immediately get an injection of cash, which you can use for whatever your main priorities are. Because you're not restricted on how you can use this money, you can start paying off some of your standing bills, you can cover your daily expenses, or you can even splurge on something for yourself. It doesn't matter.
- Financial support. If you don't currently have a job, or if your income has been stunted because of this lawsuit, you'll be grateful for the financial support. You won't have to pick up a part-time job or make yourself uncomfortable just so that you can make ends meet long enough to make it to your settlement.
- More time to negotiate. Having a settlement loan also gives you more time to negotiate. Some plaintiffs are strong-armed into finalizing a settlement negotiation early because they can't afford to prolong the process any further. With more money in your pocket, you can afford to hold out until you get what you deserve.
- Confidence. Finally, getting approved for a lawsuit settlement loan can give you confidence in the case. You're only going to be approved for this type of advance if your case is promising; this can give you significant peace of mind.
How Lawsuit Settlement Loans Work
Let's explore some more details on how lawsuit settlement loans work.
The people providing these loans typically make money based on the fees they charge to lend the principal. They can afford to lend the principal because they only fund people with cases that have a high probability of paying out.
As a borrower, all you'll need to do is provide some information on yourself, your lawyer, and your case. As long as the case looks like it has a high probability of providing you with a payout, you'll likely be approved.
At that point, you'll be able to do whatever you want with the money. When your settlement arrives, you will be responsible for paying that money back, along with the fee for the service.
One thing to keep in mind is that not all settlement loan providers are the same. Most lawsuit loan companies charge an interest rate, putting you at risk of accruing more debt. At Capital Now Funding, we never charge interest and instead only charge a one-time fee. This keeps your payoff fixed for the life of your lawsuit case.
The Application Process
What is the application process like for a lawsuit settlement loan?
- The initial application. The initial application should only take you a few minutes to fill out. You'll need to provide some standard personal information, including your name, your address, your phone number, and your email address. You'll also need to provide the contact information for your legal representation.
- Qualification. Once the lawsuit loan provider has this information, they can begin their due diligence. They typically don't care about your credit score or your financial history. They're only interested in whether your case has a high payout potential. Accordingly, they'll likely talk to your lawyer to figure out the details of the case.
- Approval. As long as your settlement looks promising, you'll likely be approved for the loan. In many cases, you can be approved in as little as one day from the time of your initial application.
- Getting the money. After approval, a reputable lender will make sure to have the money in your account within 24 hours.
What Happens Next?
If you’re ready to get started with a lawsuit settlement loan, you can fill out the initial application in a matter of minutes. Sign up today and see if you qualify!