Whether you sustained your injuries in a car accident or merely slipped and got injured at your local store, it’s important to note that personal injury lawsuits can be exhausting, time-consuming, and quite expensive. When your legal expenses and private bills start outweighing your income in the course of a case, you might want to get a loan as quickly as possible to help deal with all your expenses.
The good news is that you can always get lawsuit funding from reputable companies, such as Money First Lending when you file for compensation for your sustained injuries. However, since lawsuit funding is a pretty new concept, it’s no surprise that a vast majority of defendants have little to no knowledge of where to start.
If you find yourself in such a situation, you shouldn’t worry. Read on to understand the aspects of lawsuit finding to enlighten you on what to expect when applying for a lawsuit loan.
What Is a Lawsuit Loan?
Also called pre-settlement funding or litigation financing, a lawsuit loan is financial funding given to a plaintiff in the middle of a lawsuit. Contrary to common belief, a lawsuit loan is not like a traditional bank loan. Ideally, a lawsuit loan is much more advanced than a bank loan.
Depending on the nature of your case, a lawsuit funding company will determine the possible monetary compensation that you can get and award you a cash advance on the expected settlement. In other words, a lawsuit loan will be offered to you with the expectation that the money will be paid back once you win the case.
This is a good thing for many plaintiffs who have to deal with personal injuries while fighting for compensation.
The types of cases that are commonly eligible for lawsuit loans include but not limited to the following:
- Motor vehicle accidents
- Workplace injuries
- Medical malpractice
- Wrongful death (a loved one dies due to someone else’s negligence)
- Injuries caused by slipping or falling at a premise
- Product malfunctioning (Harm caused by a faulty product)
What Are the Fees and Charges?
It’s important to note that the lawsuit lending business is a highly-unregulated industry. Due to this, different companies offering lawsuit loans offer extra fees and charge different interest rates. For example, some companies may charge you an application fee during the application process. While you can pay this fee, you should always keep in mind that most application fees are non-refundable, regardless of whether you will win or lose your lawsuit. At the same time, some companies may charge fees and interest on your lawsuit advance, loan while others will not. Due to these differences, you should get a breakdown of all the expenses involved in the loan process. This way, you will be better positioned to know the total amount you’ll be responsible for repaying.
How Is Interest Calculated?
Since many companies offer lawsuit loans, you would expect them to provide interest at different rates. While some companies provide simple interest plans, others only offer loans on compounded interest plans. Although choosing the ideal interest plan is of utmost importance, it’s equally important to consider the company’s interest rates.
Generally, companies offer lawsuit loans at an interest rate between 2% and 4%. Again, since this industry is not well regulated, it can even offer interest rates as high as 5%. However, always remember to account for the impact that these interest rates will have on your financial wellbeing, as lawsuits can last for years. Therefore, choosing a higher interest rate can result in you paying more than you intended to.
Key Takeaways
Going through a lawsuit is quite challenging. Not only will you suffer emotionally, but your finances will be strained. However, getting a lawsuit loan is the right way to solve your financial issues. It’s essential that you look at all aspects of the loan before getting one. Ensure to consider the total amount, interest rate, and type of interest.
Interesting Related Article: “Are Lawsuit Loans Worth It?”