Negosentro.com | How to Get a Pre-Settlement Loan and Why You Need It | What’s a pre-settlement loan and how do you get one? So you probably are now thinking of getting a pre-settlement loan because you have been in some kind of personal injury such as a car accident or an accident in a mall or store and you have filed a lawsuit. A personal injury lawsuit costs a lot of money and costs a lot of your time, too. Therefore, when money gets thin as your bills keep rising and you cannot even work because of injury, you turn to a pre-settlement loan to help tide you over.
How do you get a Pre-settlement Loan?
First, there has to be a lawsuit that has been filed by your attorney due to the following:
- Personal injury (someone’s actions cause your injury)
- Auto accidents
- Injuries in the workplace
- Slip and fall (premises liability)
- Medical malpractice
- Product liability (a malfunctioning product causes your injury)
- Wrongful death (someone’s actions or negligence causes the death of a loved one)
After filing a claim, you should talk to an insurance company that will study and arrange pre-settlement funding to help you cover all your living expenses while the case is pending. Of course, the insurance company will assess how strong is your legal claim and up to how much you can win as a settlement or verdict. The insurance company as funder will have a comprehensive evaluation to be able to compute the amount they will lend you.
Agreements may state that you may or may not have to repay the advance if you lose your case. Take note that funder or lender cannot get back the money it lent you unless you win your case. That’s the risk that they have to take.
And if your settlement turns out to be for less than the amount (principal, interest and fees) you agreed to repay, the lender may not be able to demand the difference. It may only be able to claim whatever settlement proceeds are left over after other prioritized costs have been paid, such as attorney fees and court costs. But the downside of that situation is that you could be left with nothing at the end of your court case. And remember, you can still end up paying a lot in interest and fees while you await a decision.
3 Summary Benefits
Pre-settlement loans have some distinct benefits, as follows:
- You get money in your pockets for living expenses – That’s the main thing things here as you’ve got bills to pay.
- No need for a good credit standing – the lender looks at the probability of you winning a settlement or a verdict.
- You get your money fast – maybe within days or hours from application
In the End
The way to look at a pre-settlement loan is simple. You get your money even before any lawsuit is settled. While waiting for a settlement and the bills start piling up, you know where to get the money to pay for them.
Just take note that the interests for this type of financing come at a higher than usual rate. Of course, the risk is higher, too, for the insurer or funding company. Because the funder is also considering how long will they wait till your case is settled — or won.