5 Factors to Consider When Choosing a Lawsuit Loan Company | If you are in the middle of a personal injury lawsuit and facing a financial crisis, you can take a lawsuit loan to settle the most pressing needs. Lawsuit loaning companies will look at the strength of your claim before approving the loan.
In simple terms, you are taking a loan against the expected compensation. Take time to look at the pros and cons of lawsuit loans and seek guidance from your injury attorney before accepting the money.
There are many lawsuit loan companies which can make your search for one feel overwhelming. While some are genuine, others are waiting to take advantage of your desperation. That said, consider the following factors before choosing a lawsuit loan company.
How to Choose a Lawsuit Loan Company
1. Consider Your Needs
The first question you should ask yourself is why you need the money. After the accident, some people are not able to continue working because of the injuries. With that, they are not able to continue paying their bills, hence the need for the loan.
Please do not rush into the loan because it is easy money. You will repay it and with interest. With that in mind, do not take the loan if you are not in dire need of money or have an alternative, cheaper funding source.
2. Ask for the Actual Cost of the Loan
Lawsuit loans are expensive. They are associated with many fees, including interest fees, lender fees, attorney fees, and other hidden charges. If you are not careful, you will end up paying more than your settlement.
To avoid such misfortunes, ask for a breakdown of all fees associated with the loan. When it comes to loans, put assumptions away and do the math. It will shock you to realize how much that 2% monthly funding fee will accumulate before the claim is settled.
3. Do They Offer Non-Recourse Funding?
With no recourse funding, you will pay the loan only after winning the case. Remember you are taking the loan in the hope of repaying them after you win your injury claim. So what happens if you lose the case?
If the company does not operate on no recourse funding, they are offering you a personal loan, hence putting you at the risk of debt if you do not get compensated.
4. Work with a Direct Lending Company
There are brokers in the lawsuit loaning business. A broker will connect you with a lending company to earn a commission. While it is not wrong to work with brokers, they might not get you the best deal because they are also taking a cut.
However, some brokers will get you good lending companies, but it should be your last resort with clear expectations.
5. Communication Is Key
Communication is the backbone of all relationships. The lending company should be able to answer all your questions to your satisfaction. Read the terms and conditions to help you understand what you are getting into.
If the terms are not clear and the company is pushing you to sign the loan hurriedly, take a step back. Until you are clear on their rates, type of interest rates, loan fees, and any other point of concern, do not sign the agreement.
Find a Reputable Lawsuit Lender
You have probably seen many advertisements of lawsuit lenders on TV and the internet, and you are getting excited. It is a good thing to take the loan to release some financial stress after the accident. However, beware of the lending company you choose. The last thing you want is more stress in addition to the injuries, pain, and medical bills.