Should You Take Out a Loan While Waiting for Your Settlement?
The only real solace in being personally injured is getting compensation – and justice – when you win a settlement or court case against the person responsible for your harm. However, there’s no guarantee you’re going to win a settlement, and it can often take weeks, or even months, for your settlement money to arrive.
All the while, you’ll be recovering from your injuries, struggling with your medical bills, and trying to keep your head above water.
If you’re in this situation, does it make sense to take out a loan to relieve the financial strain?
The Trouble With Settlements
The promise of a settlement provides a kind of relief of its own. If your lawyer believes your case is strong, you may feel confident that you’re going to win a settlement that covers a multitude of expenses, including your medical bills, wages you’ve lost due to injury, and even compensation for your pain and suffering.
But there are a few problems with hypothetical settlements in your future:
- Uncertainty. No matter how good your case looks or how much evidence is in your favor, you’ll still face at least some uncertainty. What will you do if you don’t win a settlement? Many personal injury lawyers only charge a fee if you win a settlement, so you won’t have to worry about additional expenses – but you’ll have lots of bills and expenses to deal with, regardless.
- Negotiation and settlement time. If you’re in a position to win the case, you’ll still be forced to wait weeks, months or even years, for the case to resolve. It takes time to negotiate a deal, and even more time to get through a court case.
- Processing and disbursement time. Even after both parties reach a mutual agreement, or when the court orders a defendant to pay, it can take several weeks, or months, to receive your money. Insurance companies must review the case, the payment must be processed, your lawyer will take a cut, and only then will the money be forwarded to you. All the while, your expenses will mount.
Problems Associated With Typical Loans
Because of these problems, it’s reasonable that you would be tempted to take out a traditional loan. However, there are a few major problems associated with traditional loans:
- Credit score and qualifications. For starters, you may not qualify for a loan. Money is lent only at the lender’s discretion, and most lenders thoroughly scrutinize their potential borrowers before lending a cent. You’ll need to have a certain credit score, have minimal debt, and have a certain income level to qualify for even a basic loan. If you have a sketchy credit history or if you have a lot of existing debt, a loan may not work for you at all.
- Interest rates. Another problem with traditional loans is the associated interest rate. You’re going to pay interest on most conventional loans, accruing on an annual (or even more frequent) basis. If you don’t pay off this debt quickly, the interest can compound, ultimately leaving you with more debt than what you started with. This is one reason why debt is so financially crippling; it’s easy to fall into this trap.
- Hidden fees and other costs. Interest rates can cause a lot of financial damage, but you also need to be on the lookout for other hidden fees. Some unscrupulous and aggressive lenders have no problem charging you extra fees here and there to make more money from you. If you don’t have a firm understanding of the loan you’re taking out, it could seriously hurt you.
- Time spent shopping and comparing. Finding the best lender and the best loan can be challenging, especially with so many options on the market. It can take hours of research and contacting prospective lenders before you find the best fit. If you’re already stressed from your personal injury, or if you’re feeling overwhelmed by financial decisions, this can make things even harder for you.
- No guarantees. Perhaps worst of all is the fact that there are no guarantees with traditional loans. If you take out a loan, expecting a settlement, and that settlement money doesn’t come, you’ll still be on the hook for repaying the loan – which can put you in a much worse financial situation than you were in originally.
How a Settlement Advance Can Help
Fortunately, there’s a strong alternative to a traditional loan – a financial product that can give you immediate access to capital without the drawbacks of other loans. It’s called a settlement advance, and it’s available exclusively to candidates who are expecting to receive a settlement in the near future.
Here are the distinct advantages it presents you:
- Easy qualification. Applying for a settlement advance is easy, and as long as you have a strong, promising case, you should be able to qualify. You don’t need a minimum credit score and you won’t have to jump through hoops the way you would when applying for a conventional loan.
- Nothing owed (if no settlement awarded). With most settlement advance providers, if you don’t win a settlement, you won’t owe anything on the loan. This is a powerful guarantee that can make you much more comfortable taking out the money.
- Fixed, predictable fees. Instead of paying an interest rate, Capital Now Funding only charges a one-time fixed fee. There is zero interest ever! You won’t find another company that offers such low rates and guaranteed pricing.
- Quick application and receipt. With the right provider, the application will be quick and painless – and you’ll be able to receive your money within a day of your approval.
Are you interested in using a settlement advance to ease your financial burdens and help you recover? Or are you just curious to learn more information first? You can start applying for a settlement advance now, or contact us for more information!