Who Is the Best Pre-Settlement Legal Funding Company?
Pre-settlement legal funding has the power to give you financial flexibility during one of the most difficult periods of your life. But with such a big decision in front of you, you’ll want to make sure you’re working with the best.
Who is the best company to choose?
It’s a complicated question, since there are so many variables to consider, but we’ll do our best to educate you on all the factors you should consider.
The Basics of Pre-Settlement Legal Funding
In case you're not familiar, pre-settlement legal funding functions like a type of loan. If you're the plaintiff in a personal injury case, or if you're expecting a significant financial settlement in the future, you can use your forthcoming settlement as collateral for this loan. You can also think of this as a type of cash advance, giving you money now that you're expecting to get in the future.
You can use this money however you want, paying bills, covering damages, or even just enjoying yourself. Once the settlement comes in, you'll pay back whatever capital you borrowed plus interest or a fixed fee.
For some people, this is a lifeline that allows them to help make ends meet. For others, it's a sign of confidence that your case has a very high chance of paying out a significant settlement. Almost any plaintiff expecting a settlement in the future can benefit from this type of advance – as long as they’re getting it from the right company.
Different Companies, Different Models
In the preceding section, we generally outlined the formula for providing pre-settlement legal funding. But most businesses in the financial industry have unique approaches to products and services like these.
Different companies will have different priorities and different strategies to offer pre-settlement legal funding; they may offer different rates, different application processes, and totally different levels of service for their clients.
How can you tell which company is the best in this space?
Finding the Best Pre-Settlement Legal Funding Company
These are some of the most important factors to consider when shopping for a legal funding company.
- Fee structure. If you’ve ever been saddled with debt in the past, you know firsthand that compound interest can be a financial killer. If you take out a loan that you can't pay back immediately, and the interest rate is too high, you'll quickly accumulate more interest, ultimately multiplying what you eventually pay back.
Thankfully, the best pre-settlement legal funding companies avoid interest rates entirely, instead offering flat fees; this way, you won't be a victim of compound interest and you'll know exactly how much you'll pay back over the course of this advance. If you have the option, it's almost always better to go with a fixed fee, rather than a loan based on an interest rate.
- Fee totals. Of course, just because a company offers a fixed fee doesn't mean you should sign up for their settlement loan right away. You also need to investigate the total amount of fees that you pay for this service as well as how these fees are charged. Different companies are going to have different fee structures, and some are going to be more favorable than others. Look for a company that gives you the full amount you are approved for and doesn't take application fees out of the amount of money you receive. Instead the fee should just be added on to determine the payoff amount. This way you actually receive the amount of money you need.
- The application process. Next, look at the application process. How much time does it take to fill out an application with this company and how much information do they need to get you started? Ideally, this will be as quick and smooth as possible. While you're at it, see if you can find out how often this company accepts applications and how often they reject them. You're never guaranteed to be approved, so it pays to work with a company known for their high approval rates.
- Recourse vs. non-recourse loans. You’ll also need to figure out whether this company offers recourse or non-recourse funding. Essentially, in the context of pre-settlement legal funding, non-recourse just means you won't have to pay the loan back if you don't end up receiving a settlement. In other words, non-recourse loans give you financial protection.
- Funding disbursal. Assuming you're approved for the settlement loan, how quickly are you going to receive funds in your bank account? And are you free to use those funds however you want? In most cases, you'll get the money within a couple days, and you can use it however you choose. Make sure your funding provider aligns with this.
- Additional terms and conditions. Are there any other additional terms and conditions for this loan? Make sure you fully understand the documentation before you sign anything.
- Future loan options. Let's say you take out a settlement loan, but you quickly find that it's not enough to cover your immediate needs, or you find out that your settlement was delayed yet again. Through this company, can you apply for an additional loan? In most cases, this is the case, but you’ll need to investigate to ensure that lifeline is available to you.
- Reviews and testimonials. Before choosing to go with any pre-settlement legal funding company, you'll want to explore the reviews and testimonials left by clients who have used this service in the past. Do people generally seem satisfied with the application process and the money they've received? Or are there common concerns and complaints to be found?
- Lawyer perspectives. Ask your lawyer if they can refer you to a pre-settlement legal funding company. If recommended by a lawyer, you can be reasonably confident that the company has operated efficiently and ethically in the past.
Are you looking for a pre-settlement legal funding provider that’s trustworthy, straightforward, and experienced? You’re in the right place. At Capital Now Funding, we charge a flat fee (no recurring interest), all our terms and conditions are easy to understand, and we prioritize making our clients happy. Apply for funding today to get started!