Pre-settlement funding, also known as a lawsuit advance, is when a third party provides you with money before your case settles. The funding is based on the expected value of your settlement, and you only have to repay the amount (plus interest) if you win your case or reach a settlement.
If you’re in the middle of a lawsuit and need money to cover expenses, pre-settlement funding can provide the financial assistance you need. It can be used for a variety of purposes, including living expenses and medical bills, but typically cannot be used for costs associated with your case.
Pre-Settlement Finance – Getting Money Before a Settlement
Because personal injury cases can take as many as several years to settle, getting money upfront can be critical. Eventually, the goal is to be fairly compensated for your injuries. In the meantime, you may be unable to work due to your injuries. That’s where pre-settlement loans can help – they can provide you with the money you need to cover your expenses until your case settles.
Pre-settlement loans are not like traditional loans. With a traditional loan, you receive the money upfront and then make payments over time. With a pre-settlement loan, you only have to repay the lawsuit loan if you win your case or reach a settlement. If you don’t win or settle, you don’t have to repay the loan.
What Is Pre-Settlement Funding?
Pre-settlement funding is a non-recourse purchase of an equitable lien in your personal injury case. What does that mean? First, let’s start with the word “non-recourse.” A non-recourse loan is a loan that is not backed by collateral. In other words, if you don’t repay the loan, the lender cannot come after you for the money.
The second part of the definition – “a purchase of an equitable lien in your personal injury case” – refers to the fact that the funding company is essentially buying a part of your case. When you receive funding, you are selling a part of your potential settlement or jury award to the funding company in exchange for money now.
Fees and Interest on Pre-Settlement Legal Funding
Pre-settlement loans are not free – there are fees and interest associated with them. The fees are typically a percentage of the total amount you are borrowing, and the interest is charged on the amount you borrow plus the fees.
For example, let’s say you are borrowing $10,000. The processing and application fees come to $500, so you would be charged interest on $10,500. If the interest rate is 17.5% per six months, your settlement loan would accrue $1,837.50 of interest for each six-month period. Of course, you are not responsible for making payments, so the total interest simply continues to be added to the principal value. All of which is payable at the conclusion of the case.
[LEARN MORE]: How To Shop for Low-Interest Pre-Settlement Loans
Is Legal Settlement Funding a Loan?
No, in most states legal settlement funding is not a loan. A loan is a debt you owe that must be repaid, regardless of the outcome of your case. With legal funding, you only have to repay the amount you borrow plus interest and fees if you win your case or reach a settlement. If you don’t win or settle, you don’t have to repay the funding.
Benefits of a Lawsuit Cash Advance from Provident Lawsuit Loans
There are many benefits of getting a pre-settlement cash advance from Provident Lawsuit Loans.
First, the application process is quick and easy. We can usually give you a decision within 24 hours of receiving your completed application.
Second, you don’t have to worry about making payments – you only have to repay the amount you borrow plus interest and fees if you win your case or reach a settlement.
Third, there are no upfront costs or hidden fees. You only have to repay the amount you borrow plus interest and fees if you win your case or reach a settlement.
Fourth, we’re here to help you every step of the way. We’ll work with you and your attorney to make sure you get the money you need to cover your expenses.
What Types of Legal Cases Qualify for Pre-Settlement Loans?
Most personal injury cases qualify for pre-settlement funding, including car accidents, slip and fall accidents, medical malpractice, and more. If you’ve been injured and someone else is at fault, you may be eligible for pre-settlement funding.
Is Pre-Settlement Funding Right For Me?
If you’ve been injured and are waiting for your case to settle, you may be wondering if pre-settlement funding is right for you. The answer depends on a few factors, including your financial situation and the needs of your case.
If you’re struggling to make ends meet and need help covering your expenses, pre-settlement funding may be a good option. It can provide you with the financial assistance you need to cover your living expenses and other bills until your case settles.
Consumer Protection Guidelines
When considering pre-settlement funding, it’s important to be aware of the fact that the industry is not well regulated. In some states, there are laws that protect consumers from unfair or abusive practices by legal funding companies. However, in most states, there are no specific laws governing the legal funding industry.
As a result, it’s important to do your research and choose a legal funding company that you can trust. Be sure to read the fine print and understand the terms of your agreement before signing anything.
Conclusion
If you’re in the middle of a lawsuit and need financial assistance, pre-settlement funding may be an option for you. Pre-settlement loans can provide you with the money you need to cover your expenses until your case settles.
Before you decide to get a pre-settlement loan, it’s important to understand the terms of your agreement and the fees and interest associated with the loan. It’s also important to choose a reputable legal funding company that you can trust. If you have any questions about pre-settlement funding or want to learn more about how it works, contact Provident Lawsuit Loans today.