When you’re injured by an entity or accident, payment for your injuries doesn’t come overnight. If the injury is a financial one, every day on the calendar feels like a year of struggle.
Settlement loans get you through that struggle until the big payday arrives.
Advanced lawsuit funding is a way to get quick cash without the hassle of lengthy credit checks. It’s similar to getting a cash advance, but it’s based on the circumstances of your lawsuit.
Taking out a settlement loan gives you a financial lifeline when you need it most. Not to mention, if you have outstanding medical bills, lawsuit funding helps you pay for it.
There are several things you need to understand about lawsuit settlement loans. You can check out our guide here to learn more.
What Are Settlement Loans
When you file a class-action suit, you wait with a group of people to share the financial reward. Sometimes waiting on the funds takes too long and puts the members of the suit in financial straights.
Settlement loans are loans against the money you’re waiting for.
The convenient part is that you don’t have to pay back lawsuit loans out of your pocket. The lender deducts the money you borrowed from the settlement funds once they’re disbursed.
Reasons to Take Out a Settlement Loan
People take out settlement loans for many reasons. Since lenders don’t specify how you can use them, how you spend the money is up to your discretion.
Victims of personal injury lawsuits often utilize advanced funding more often than others. If you’re out of work due to injury, it affects your financial way of life. Bills—household and medical—pile up until they become unmanageable.
Plaintiffs may use the funds for:
- Loss of wages and income
- Household expenses
- Medical bills
- Lawyer fees
But again, it doesn’t matter how the funds get utilized as long as they’re paid back out of the disbursement.
What to Look Out For
There’re pros and cons to every type of financial transaction, including settlement loans. You need to know them before you put a loan against your reward.
Lenders loan off of winnability. They only take the risk of issuing settlement loans if the case favors the plaintiff. In most class-action suits they do, but personal injury cases get tricky.
They don’t always qualify for advanced funding.
Expect to pay fees and finance charges with settlement loans, and they aren’t cheap. interest rates are pretty steep. Depending on how long it takes for the case to settle, mounting interest could usurp a large chunk of your remaining award.
Consider Taking Out a Loan
Settlement loans save the day when a lawsuit puts you in a financial bind. Research reputable lenders then get the money you need to continue your way of life.
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