Lawsuit Loans: The Expensive Alternative
When taking a lawsuit loan, plaintiffs borrow money ahead of the outcome of their pending legal action. This type of pre-settlement funding tends to be very popular for a large array of legal cases. Often the proceeds are used to keep a plaintiff afloat pending their case outcome and the money is applied to outstanding debt such as mortgages, for family matters or against large, mounting medical bills.
Lawsuit Loans are pre-settlement funding that require a repayment of the proceeds regardless of case outcome. You win, you still repay…with interest! Generally used in personal injury cases due to the nature of the financial payouts, lawsuit loans can carry variable interest rates and escalating costs. These types of settlement loans are heavily advertised and should be considered very carefully before deciding on this lawsuit funding. Plaintiffs should understand the costs, the payment structure and carefully select the right company to provide them financing.
Lawsuit loans differs from a lawsuit cash advance due to the non-recourse nature of the cash advance pre-settlement. The cash advance does not require repayment, regardless of your case outcome. You lose, you owe Cash For Lawsuits nothing.
Beware of High Costs
Lawsuit loans can be expensive and carry risk as a result. The risk is introduced due to the possible length of the trial and the interest rate you are obligated to re-pay. In some cases, lawsuit loans may require repayment that is much more than the amount that was borrowed.
In terms of interest rates, depending on the company used, these can escalate to very high amounts for these settlement loans. It is not uncommon to see rates that are more than 25% and as high as 50-60%. To add to it, the interest can compound, further increasing the required payback.
For these reasons, Cash For Lawsuits recommends other options such as Lawsuit Cash Advances. This type of pre-settlement funding carries no interest or escalating costs and includes a non-recourse clause which means if you do not win your case, there is no repayment required. Cash For Lawsuits carries all the risk in this type of pre-settlement funding, making it a very attractive option for our clients. To further help, the application is fast and easy and the process takes anywhere from 24-48 hours.