As a lawyer, your primary job is serving your clients’ legal needs. Accordingly, you’re going to work hard to do your research, fill out the paperwork, negotiate with other parties, and if necessary, argue in court on your client’s behalf.

But throughout the settlement process, your clients are likely going to be stressed. They’re probably still recovering from their illnesses and injuries, and they may not have any money coming in. On top of that, they’re in the midst of a fierce legal battle – and they have no idea when, or if, they’re going to get their settlement money.

If you want to make your clients happier and relieve some of that stress, you can recommend your clients seek out a pre settlement loan, also called a settlement advance. But with so many lenders out there, you’ll need to do your research and be careful about who you recommend.

So you are probably wondering, where can you find a pre settlement lender with low interest rates and reasonable terms and conditions?

Why Pre Settlement Loans Are So Valuable for Clients

In case you aren’t familiar, pre settlement loans are a financial product designed to help clients in pending lawsuits. If it looks like a client is going to win a settlement in the near future, they can apply for this type of advance in just a few minutes. Assuming they qualify (which most promising cases do), they can get access to funding within a couple of days.

If the pre-settlement loan is non-recourse, the borrower won’t owe anything if the settlement is never received. Otherwise, the borrower will be required to pay back the loan – usually with interest.

Pre-settlement loans are valuable for your clients for a number of reasons:

• Immediate financial relief. For starters, the fresh injection of capital gives them a sense of immediate financial relief. If they’ve been delaying paying rent or if they’ve been cutting important expenses, they can finally take action and go back to living a normal life. If they’re out of a job and won’t be able to return to work for a few more weeks, they no longer have to stress about getting through that employment gap.
• A sense of support and cooperation. If you’re the one who recommended pre-settlement funding, your client will feel a stronger sense of support and cooperation. They’ll feel like you care about them for more than just a bottom-line paycheck; they’ll feel like you support them on a personal level. That, in turn, can help you earn better reviews and get more referrals.
• Assurance of the case’s odds of success. Pre-settlement lenders don’t usually care about a borrower’s credit score or financial history. Instead, the funding is based almost entirely on whether or not the case is likely to win a settlement (and how much that settlement is going to include). If a client gets approved for this type of loan, they can walk away with a profound sense of relief; a third party trusts that they’re going to win a large settlement.

The Dangers of High Interest Rates

There is a dangerous downside to some types of pre settlement funding, however: high interest rates. Some lenders only grant loans with the stipulation that borrowers pay back the principal with compounding interest. If that interest rate is high enough, this could quickly transform a simple advance into a predatory trap.

On top of that, many institutions that charge high interest rates also charge servicing fees and impose other “hidden” charges to squeeze even more money out of your clients.

How to Find Low Interest Pre-Settlement Loans for Clients

What can you do to find low-interest pre-settlement loans for clients?

The short answer? You have to shop around. Pre-settlement lending isn’t a highly regulated industry, and it’s relatively in demand, so there are many different options to choose from. You’ll need to review each company’s offer carefully, comparing interest rates directly and checking for hidden fees, if you want to recommend the best option for your clients. Online searches are a great way to start, but it’s also a good idea to talk to other lawyers to see if they have any past experiences with reliable and ethical pre-settlement lenders.

Are Interest Rates Even Necessary?

Here’s an important note: you may be able to find a pre-settlement lender that doesn’t charge an interest rate at all. These institutions still need to make money somehow, but instead of charging an accumulating interest rate, they charge a fixed fee. Your client will know exactly how much they’ll owe on the loan – and they’ll know it before they ever finalize their application. This fee is not subject to change, nor does it compound over time; that makes the pre-settlement funding transaction not only more transparent but also more affordable.

Did you know that Capital Now Funding is the only pre-settlement funding provider that charges ZERO RECURRING interest?  That's right!  With Capital Now Funding your client's payoff will be fixed for the life of the case. In the majority of cases, Capital Now Funding's fixed-fee, zero-recurring interest funding will be the best for your clients.

Pre-Settlement Loans: Doing Your Due Diligence

The big picture here is that you have to do your due diligence before you recommend any pre-settlement funding provider to your clients. Be sure to evaluate the types of fees charged, the company’s previous reputation, and whether the loan itself is non-recourse. Once you have a reliable partner on your side, you can give more referrals, relieve client stress, and ultimately help your law firm grow.

You know that a high interest rate loan could cripple your client's finances. Here's the good news: not all pre-settlement loans have high interest rates. Some don't even have interest rates at all. If you're interested in learning more about the funding we offer or the process your clients can follow to qualify for it, contact Capital Now Funding today!