A settlement loan, or also known as a lawsuit loan, legal funding or lawsuit cash advance is an accept no-risk lending option. You’re probably wondering, how can an any lending product have no risk attached? First, you’ll need to understand what a lawsuit settlement loan is how it can benefit a plaintiff in a pending lawsuit. Second, you’ll need to understand why a lawsuit settlement can be considered a no-risk lending product. Third you’ll need to understand if a lawsuit settlement loan is right for you. This article will dive deep into these questions to help you make the right choice. collection laws in California
A lawsuit loan is a simple lending product and easy to understand. Only plaintiffs in pending lawsuits are able to apply for settlement loans. The whole concept behind this lending product is to lend money to the plaintiff with the possible future settlement as collateral. Basically the lender is buying interest into your lawsuit in return for interest on the original amount. The reason a lawsuit settlement loan can benefit a plaintiff is due to the fact they’re only required to pay it back if they win their lawsuit.
Above you’ve learned that a plaintiff is not required to pay back the loan if they lose their case. This means, if the plaintiff was to apply for a settlement loan, get approved and then lose their lawsuit they would not be required to pay back the settlement loan. This is the main reason you can consider a lawsuit loan as a no-risk lending product; if you don’t win, you don’t pay. This prevents the plaintiff from having to figure out how to pay back the loan if they lose their case. This is the primary benefit of a settlement loan, not to mention that your credit history, current employment and current income aren’t factors in the approval process.
After reviewing the above information you still need to decide if a lawsuit loan is right for you. A plaintiff is usually only able to take out at the most 10% of their possible future settlement. You’ll be required to pay back the full amount, plus interest and fees if you win your lawsuit. Some lenders do have some pretty high interest rates and it’s a good idea to shop around with different lenders. If you can financially support yourself during your pending lawsuit then a settlement loan might not be something you need. They should only be used by people in dire need of cash during a civil suit; this is usually the situation with accident or injury victims who cannot work and have medical bills piling up. Make the right choice when deciding if a lawsuit loan is right for you.