The Differences between a Structured Settlement Loan and Pre Settlement Loans

If you’re the plaintiff in a lawsuit, you’re probably asking yourself what are the differences between a structured settlement loan and a pre-settlement loan? It all comes down to timing and if you’re expecting to receive any sort of financial compensation at the culmination of your trial, you may find yourself growing impatient with the long wait. Chances are, you’ve come across numerous legal funding options while searching for answers about how you’ll receive your money. You’ve probably come across articles about low interest pre-settlement loans and taking a cash advance on a structured settlement, and you’re ready to explore these options further.

But the first thing you should know is that not all legal funding is the same.

Continue reading to learn more about the differences between a structured settlement loan and a pre settlement loan.

Most people don’t realize that there are huge dissimilarities between structured settlements and lawsuit settlement loans. While both provide money via your lawsuit settlement, they do so in very different ways. Essentially, it all comes down to timing: Pre-settlement lawsuit funding is a way to receive money long before your case even makes it to trial, while a structured settlement is money you receive after your lawsuit has already concluded. Both concern the question of lump sum vs. monthly payments, and both concern your unique financial needs at various points during the legal process. If you need help making the decision whether to pull the trigger on pre-settlement funding or waiting to get money from a structured settlement instead, you’ve come to the right place.

First, let’s define our terms.


During settlement negotiations, your attorney may present the prospect of a structured settlement payout. A structured settlement is when a final ruling has been delivered on your case, and a long-term payment plan has been arranged for your reward. Payments are normally doled out in annual installments until your settlement amount has been reached.
Conversely, plaintiffs who are looking for more immediate cash out of a structured settlement can sell these payments in favor of a larger lump sum instead. A lump sum payment offers a way to get more money upfront at the culmination of your lawsuit, rather than collect smaller payouts stretching out for years on end. A good lawsuit funding company will be able to assist you in your quest to obtain a lump sum payout from your structured settlement.


Pre settlement funding—also known as lawsuit funding or even lawsuit loans—is an immediate cash advance against the monetary compensation one can expect to receive at the end of a trial. Some people choose to research how they might take out pre settlement funding as a way to receive money prior to the resolution of their case. This can be a helpful option for any plaintiffs dealing with financial strain, and a great source of income over the many months it takes for a case to make it to trial. Borrowing against your settlement can help you stay afloat financially and empower you to hold out until the end of your trial so that your lawyer can get you the best possible settlement amount. You can get a lawsuit loan without an attorney, but it will be easier if your lawyer is on board to walk you through it. They are the custodians of all the information pertaining to your case that lawsuit funding companies must review before approval of your settlement loans.

It can take many months before your lawsuit sees the inside of a courtroom. During that time, you may find yourself struggling to pay bills, and waiting indefinitely simply isn’t a viable option. If this sounds like you, pre-settlement lawsuit funding might be a good fit. It’s a way to receive cash well in advance of a case settling—even when the outcome of your suit hasn’t been established—so it takes the waiting out of the equation. It also takes away the stress, as the lawsuit funding company is the one who assumes all the risk when granting a lawsuit loan.

It’s important to know that lawsuit funding loans are different from regular loans, due to the fact that you will not be expected to repay the funding until after your case has been resolved. What’s more, if the plaintiff loses their case altogether, they won’t be required to repay the funding at all. Legal funding is non-recourse, meaning lawsuit loan companies will take no recourse to recoup their funding if your case ultimately fails. So, unlike a bank, a settlement loan is a no-risk proposition for the consumer.


When it comes to a pre-settlement cash advance or structured settlement lump-sum payment, the decision is ultimately yours to make. And while most funding companies only provide assistance with one or the other, Legal-Bay is a full-service funding company that can offer services for both. The processes are different, and structured settlements take longer because some jurisdictions require court approval. Pre settlement funding, on the other hand, can happen as quickly as 48-hours from the time you apply to cash in hand, and some plaintiffs even qualify for same day pre settlement loans.

Legal-Bay will be happy to discuss your financial options. If you’d like to reach out, we have an entire team of very skilled, very dedicated employees who will be able to offer all the details about structured settlements and pre-settlement funding while answering any questions you may have. We offer legal funding for all different types of cases. And because the loans are non-recourse, you really have nothing to lose.

If you’d like to know more, you can visit our FAQ page, and feel free to contact us for more information on how you can obtain a non-recourse cash advance on a pending lawsuit or help navigating your structured settlement.

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