What to Know When Considering a Lawsuit Loan?

Being involved in a lawsuit can be challenging. Whether you’ve been injured in an accident or wrongfully terminated, lawsuits bring a whole host of new experience for plaintiffs. Some might be surprised at the time it takes to ultimately receive compensation. Others experience cash flow issues which are difficult to deal with. Regardless of the reasons why you’re considering a lawsuit loan, you’ve come to the right place. In this post, we examine the things you need to know when considering a lawsuit loan.

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What is a Lawsuit Loan?

Lawsuit loans are specialty finance transactions where plaintiffs in civil lawsuits sell a portion of their compensation prior to recovery. Lawsuit funding companies offer this financial service to plaintiffs who are suffering financially and have nowhere else to turn. Lawsuit loans are often a “last resort” to raise immediate cash for these litigants.

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How Do Lawsuit Loans Differ from Regular Loans

Lawsuit loans are structured as a transfer of property rights in the future proceeds of a case. They are advances on a potential recovery. If there is no recovery (the case is lost), the lawsuit loan is not repaid. Because the repayment of pre-settlement funding is contingent upon the plaintiff’s case settling, there are no monthly payments, collateral, insurance, or credit checks required.

Regular loans are different in that they are either repaid or defaulted upon. The contract specifies repayment at some point in the future under all circumstances. It is not contingent upon a certain event or occurrence. Further, regular loans normally require periodic payments to reduce the loan balance.

Perhaps the biggest difference between regular loans and lawsuit loans is the cost. Because there is additional risk to the “lender”, lawsuit loans are generally more expensive than typical loan agreements. When a lawsuit with funding is lost, it represents a total loss of the funding capital. Lawsuit loan pricing reflects the cost of providing the service and the risk of loss of the entire investment made by the “lender”.

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Considering Lawsuit Loan Rates and Fees

Lawsuit loan rates are normally at the forefront of settlement loan regulation arguments made by parties who discourage the practice. Opponents wish to categorize lawsuit loans as regular loans and seek to regulate the practice for plaintiffs’ “own protection” from predatory lending practices.

As described above, lawsuit loan pricing reflects the additional risk lenders must accept to provide these products at a profit. Most states recognize the differences. Some states however, prohibit the practice altogether.

What’s most important when considering a lawsuit loan is to understand exactly what the cost should be. If they are offered in a jurisdiction where lawsuit lending is not regulated, funding companies can charge whatever they want. That’s the bad news.

The good news is that clients can shop for lawsuit loans to find the best deal. And shopping has never been easier since most reputable lawsuit loan companies charge competitive rates to their clients. Even further, many companies adhere to lawsuit loan best practices to help their clients understand exactly what they are getting in return for pledging a portion of their future recovery.

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Why Consider Fair Rate Funding for Your Lawsuit Loan

If you are considering a lawsuit loan, you know it can be a great tool to help you get through financial difficulty until your case resolves or you’re able to return to work. If you’ve been injured in an accident and need cash to cover expenses we can help. To apply for a lawsuit loan call Fair Rate Funding at 888-964-2224 or Apply Now online.

Why Choose Fair Rate Funding

You obviously have a choice in who you use for legal funding. We offer:

• Simple and Easy Process – Approval only on the strength of your case.
• Risk – Free Proposition – Only repay if you win your case.
• Rapid Approval and Funding – Approvals often within 24 hrs.
• Up Front Pricing – Absolutely no hidden fees.

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