The Basics Of Settlement Loans

If you have a pending lawsuit, you may be considering something called settlement loans. This is when, if you are approved, you receive a small advance on what the actual settlement is that you are looking for in the lawsuit. This amount is usually below 10% of the whole settlement. Unlike traditional loans, you do not need a credit check or a certain income to qualify for this type of loan. However, since you do not have to pay the settlement loan back if you do not win your case, you will need a strong case to begin with. Most small and frivolous cases will not be approved.

Why Settlement Loans May Be a Good Idea for You

Especially if you were injured and can’t return to work for a period of time or indefinitely, you would want to look into litigation funding to help you pay for your daily expenses while the lawsuit is pending, such as your housing and other monthly expenses. Settlement funding can help you to get through the rough patches while you are waiting for the settlement of your lawsuit. It can also help to pay for attorney fees, and you will see that there are no actual interest rates because these types of loans are not traditional loans. Besides this not being dependent on your credit rating, you are also free to spend the money however you see fit.

What to Watch For

When considering settlement loans you will want to remember that although they can be a big help during this time, you must proceed with care, as with any other type of loan. Although you can spend the money any way you want, you may need to pay a percentage to your attorney if you already have a standing agreement with them, and you should consult with your attorney before spending any of the money.

What You Should Know

If you should win your case, there will usually be a written agreement between the loan provider and your attorney on how you will be repaying the loan. With settlement loans, most providers do not charge you any upfront costs, but you again need to confer with your attorney regarding your particular case and any agreements made with them. Those in need of help paying medical expenses, repair costs, regular household bills and other obligations should seriously consider litigation financing as one possible solution.