LAWSUIT LOANS vs Pre Settlement Cash Advances


In 2018, injuries alone led to a whopping 45.5 million visits to U.S. Emergency Departments.

As if that’s not bad enough, many of these injuries were preventable. In fact, one accidental and preventable injury now occur every second in the U.S.

It’s no wonder then that accidental injury is now a leading cause of death and disability in the country.

So, if you’ve been in an accident caused by another person, you likely filed a personal injury lawsuit. All those medical bills, however, are draining your bank account. This has you wondering if a pre-settlement cash advance or a conventional lawsuit loan can help you.

The simple answer is yes, they can tide you over while you wait for your settlement. That doesn’t mean you should just apply for either. There are huge differences between the two, from their requirements to repayments.

That said, keep reading to know how these legal funding programs differ so you can make the right choice!

The Lowdown on Lawsuit Loans

Did you know that in 2018, the average annual health care spending in the U.S. was $11,212 per person? That’s already expensive, so imagine how major injuries can make it even more so.

This is why lawsuit loans have become popular among personal injury plaintiffs. As the term suggests, these are loans often applied by people with an ongoing legal battle. Aside from massive medical bills, personal injury victims also often lose income.

Depending on the type of lawsuit loan you get, you either take on actual debt or an advance of your settlement. The former is often paid back in installments, like a typical loan. If you apply for a cash advance settlement, you pay back what you “owe” only if you receive the actual settlement.

A Closer Look at Pre Settlement Cash Advance Programs

Pre-settlement cash advance loans are also known as lawsuit cash advance loans. They are a type of lawsuit loan, but they’re non-recourse loans. Meaning, if you don’t win your personal injury case, you won’t have to pay the lender back!

Whereas with traditional banking lawsuit loans, you may have to pay them back whether you win the case or not. Moreover, many of these lawsuit financing programs come with monthly interest rates. If you sign a contract for one of these, you’d have to make monthly payments for the loan.

Also, know that legislation exists for many states with available lawsuit funding. For instance, Illinois requires lawsuit funding companies to register with the DFPR. They also need to follow disclosure requirements and fee limitations.

The Key Differences

Here are some other differences between lawsuit loans and lawsuit cash advance loans:



Eligibility Requirements

The best providers of lawsuit cash advances only look for two eligibility factors. First, you already have a pending lawsuit. Second, you have an attorney representing you.

If you meet both, then you can go ahead and send your cash advance application.

Also, don’t worry about collateral, as a good lawsuit cash advance lender doesn’t require any. The loan is already secured, after all, when you agree to pay them back part of your settlement. Again, you’ll only pay the lender back if you win the case and receive the settlement.

Meanwhile, traditional lenders of other lawsuit loans may look at your credit score. This can be a problem if you’re part of the 16% of Americans who have a very poor FICO score. Even if you qualify despite your bad credit score, they may need you to submit other forms of collateral.

Application Process and Processing Time

On the other hand, from application to approval, applying for pre-settlement funding usually only takes two days. Once you forward your application, the lender will look at your case and its merits. Meaning, they’ll review how big your chances are of winning the lawsuit.

If they see that you’re likely to win, they’ll calculate how much advance they can give you. They’ll base this off your case’s settlement amount. You can negotiate either a lower or higher advance, but make sure you negotiate within reason.

You’ll receive the money soon after you accept the lenders offer. Again, that can be in as little as 24 hours. This can be a life-saver, especially if you’re running out of time to pay bills like mortgage and utilities.

With standard banking lawsuit funding, you may have to wait longer to learn if you qualify for the loan. This is especially true for lenders who perform credit checks on their applicants. Pulling out your financial records alone, much more reviewing them, can take a lot of time.

Repayment??? – Non Recourse Loans???

So long as you work with a reliable lawsuit cash advance lender, you won’t have to pay an application fee. The only time you have to make a payment is if you secure your settlement. There are no monthly charges to worry about. Also, Keep in mind a professional Lawsuit Lender will offer a Non Recourse Loan which simply means if you lose your lawsuit you owe nothing…

Of course, if you win you do have to pay a service fee for your lawsuit cash advance. The good news is, you don’t have to pay this right away. A reliable funding company will only ask you to pay for this after you receive the settlement.

Many regular bank style lawsuit loans, on the other hand, come with application fees. If you take out a typical loan, it’s likely you’d need to pay it back in monthly increments too. All those interest payments can quickly add up,and you may end up owing more than your settlement amount.

Get the Help You Need Now with a Lawsuit Cash Advance

When it comes to various lawsuit loans, the devil is in the detail. So, be sure that the lender is offering you a pre-settlement cash advance and not a typical banking lawsuit loan. This way, you can make certain you’re signing a contract for a non-recourse funding program.

Ready to apply for a lawsuit cash advance? If so, then be sure to check out our comprehensive guide to pre-settlement funding



first! This’ll help you secure not only the best offer, but also ensure you’ll work with a legitimate lender.

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