Are Settlement Loans A Good Idea For You?

If you’re injured in a car accident or elsewhere through no fault of your own, filing a lawsuit and winning a judgment or receiving a settlement is at least one way to recoup some sort of compensation for your pain and suffering. However, the justice system is not always quick, and that can mean that you are waiting weeks, months or even longer for a settlement or award. In the meantime, it can be very difficult to get by financially. If you’re injured, you may not be able to work right away after the incident that caused your injury, and that can leave you in dire straits indeed. Fortunately, settlement loans can address this requirement so that you have the money you need to live.

How do settlement loans work?

Settlement loans are usually offered in personal injury cases where you are almost certain to win some sort of settlement. It works like this: a company that specializes in litigation financing takes a look at your case and determines whether or not it’s valid and is likely to win. Your attorney must be hired on contingency, meaning that he or she will collect no monies unless you win. In addition, your attorney must agree that you can apply for a settlement loan against your likely winnings.

Once this has all been done and your case is found to be valid, the litigation funding company will offer you a percentage of your expected award or judgment, usually about 10%.

What’s different about these loans?

No collateral required

Settlement loans are different than other types of loans because unlike most loans, you won’t be required to offer any kind of collateral.

No credit check required

There is no credit check to determine whether or not you are eligible. You’re likely eligible for a settlement loan if you have a personal injury case (non-frivolous) pending in court or working its way toward settlement, and you have to have a lawyer hired on contingency who has agreed that you can apply for a settlement loan.

No need to pay the money back if you lose your case

The best thing about settlement loans is that if you lose your case, you arenot required to pay the money back. If you win, the company will require you to repay the loan, plus collect fees. Therefore, settlement loans can be a great way to fill the financial stopgap between the time your injuries occur and the time of your award.