When filing a lawsuit, most individuals do not receive the instant gratification of a quick payout. The average personal injury lawsuit takes six months to a year before settling. More complex cases can take even longer.
While a case is pending, it’s hard to make ends meet with growing bills, legal expenses, and lower income. With lawsuit settlement loans, you can get the cash you need to get by.
What is lawsuit funding, and when would it be a good idea? Continue reading for more on this type of funding and a list of 10 reasons it might be a good choice for you.
What is Lawsuit Funding?
Lawsuit settlement funding is a cash advance provided to an individual in the anticipation of a settlement payout. This is not a traditional loan, but you must pay the amount back if you win your settlement.
Why Do I Need a Settlement Loan?
Settlement loans are not for everyone, but they can be a great option if you find yourself in need of immediate financial assistance. There are several circumstances where this type of help might be ideal.
1. You’ve Lost the Ability to Work
If you can no longer work either temporarily or permanently because of an injury, waiting for a payout on your settlement can be stressful. This type of funding provides the cash you need to cover everyday expenses like food, rent, and utilities while you get back on your feet.
2. You’re Under Financial Strain
Pre-settlement lawsuit funding helps ease financial stress. If you experienced a personal injury or wrongful imprisonment, you might be in a situation where your bills piled up, putting you in a financial bind.
Lawsuit loans help you recover from this strain by providing you with the funds to handle your finances before they become a bigger issue.
3. You Don’t Want More Debt
If your lawsuit is because of an injury, you may have growing medical expenses from your treatment. Medical bills add up and you may find yourself worried about accruing more debt.
Filing a settlement requires a lawyer and legal fees to add to your growing list of expenses. Getting lawsuit funding helps cover these costs without adding to your existing debts.
4. You Need Supplemental Income
Settlements take time and resources. You’ll need to take time off from work to meet with lawyers, attend hearings, and run errands related to your case. If you’ve been working in a limited capacity already, this extra time off can be detrimental to your finances.
Lawsuit settlement loans help supplement your income while your lawsuit is pending and keep money in your pocket. If you’re out of work, these loans can help tide you over while you search for alternative employment.
5. The Funds Arrive Quickly
If you’re in an immediate bind, lawsuit loans deposit into your account faster than traditional loans. In most instances, these advances can be processed and deposited into an individual’s account within 24 hours.
6. You Have Poor Credit
To receive pre-settlement lawsuit funding, you don’t need to run a credit check. This makes these loans a great option for those with poor credit history who struggle to get approval for more traditional bank loans.
7. Risk-Free Option
Traditional loans must be paid back with little flexibility for unique situations that make you unable to do so. Lawsuit funding, however, is a risk-free option and if you do not win your settlement, you will have no obligation to pay back your advance.
8. No Extra Payments
If you’re worried about adding to your monthly expenses with another loan, lawsuit funding may be an attractive option for you. Unlike bank loans, you will not have any recurring monthly payments with this kind of funding.
This helps individuals avoid payments they can’t afford and a negative effect on their credit. Instead of payments, they will pay the pending lawsuit loans with their settlement winnings once the process is complete.
9. Cheaper Than a Bank Loan
Bank loans often have high interest rates, monthly payments, and require a steady income and a good credit score to receive. If you were to lose your settlement, banks would still expect you to pay.
Pre-settlement loan funding expects nothing from you unless you win your case. This means no monthly payments or accrued interest to add to your expenses.
10. More Time for Negotiation
One of the best reasons to choose lawsuit funding is that it provides more time to negotiate a larger settlement. Individuals often run out of financial support in the middle of their case and find themselves pressured to settle for less to make ends meet.
Lawsuit funding buys an individual time to focus on the case and win the settlement they deserve.
Be Aware of the Downsides
Despite the many benefits of lawsuit settlement loans, you should be careful to make an informed decision and be aware of the downsides. Some lawsuit loan companies will tack on additional fees, and it’s important to do your research before choosing one.
You will need to have a lawyer to get approved for any lawsuit funding, and you will not receive your full settlement. You must pay back the amount you receive if you win.
Are Lawsuit Settlement Loans Right For You?
If you’re filing a lawsuit and need some extra cash to tide you over, lawsuit settlement loans may be a viable option. If any of these ten reasons resonate with you, talk to your lawyer about applying for lawsuit funding today.
Stay informed when choosing a lawsuit loan company and read the contract before making a decision. Legal-Bay is one of the best lawsuit loan companies out there today. Read more about the types of cases we fund.