Pre-Settlement Lawsuit Funding: The Pros, Cons, and Everything in Between
Were you part of an accident that left you out of work through no fault of your own? Or did something happen outside your control that caused significant damage to your home or property? Many people who find themselves in these circumstances ruin their finances while waiting out lengthy settlement negotiations.
Thankfully, there is a solution that works for some people. Pre-settlement lawsuit funding can help pay bills, repair damages, and keep your finances stable while waiting for your settlement.
This type of loan isn’t for every person or every case, however. Continue reading to learn the pros and cons of pre-settlement funding, as well as how to decide if it’s the right choice for you.
Pros of Pre-Settlement Lawsuit Funding
There are many benefits to receiving a loan while you await a lawsuit settlement. The most significant advantage is that pre-settlement funding can help you keep up on bills, medical costs, and other finances if unable to work. It can also be used for necessary repairs that can’t wait.
Other pros of receiving pre-settlement funds include:
- May provide more time to negotiate an appropriate settlement
- Funds don’t need repayment until settlement has been received
- No repayment if the settlement isn’t won
- Funding is usually less expensive than bank loans
- Credit checks usually aren’t required
This isn’t an exhausted list of potential benefits. There may be more benefits of getting pre-settlement loans for some people or in certain situations.
Cons of Pre-Settlement Lawsuit Funding
There are downsides to everything, and pre-settlement lawsuit funding is no exception. The biggest downside is the added fees, which will need to come out of your settlement. Fees vary by provider but range from low to extravagant.
Other potential downsides of getting a loan while awaiting your settlement include:
- Can end up being expensive
- Not everyone will qualify (so it isn’t a one-size-fits-all solution)
- Could be challenging to find a reliable provider that doesn’t charge exorbitant fees
- Funding can’t be the total anticipated settlement amount
- Additional (sometimes time-consuming) paperwork will need filling out
This isn’t a complete list of potential downsides. There may be other cons to securing a pre-settlement loan for certain people or in specific situations.
Deciding if a Loan Is Right for You
A pre-settlement loan isn’t right for every person. They may be right for you if you’re unable to work, have high medical costs, or anticipate a lengthy settlement process. This type of loan may also be suitable if substantial damages can’t wait to be fixed while a settlement amount is being determined.
More Questions About Pre-Settlement Lawsuit Funding?
Pre-settlement lawsuit funding can help people awaiting settlements stay afloat financially. These loans aren’t for everyone, however. The pros and cons above can help people determine if this is the right path to take.
Do you have more questions about pre-settlement funding?
Check out our other posts. You’ll find blogs on pre-settling funding, lawsuits, loans, and similar topics to help you learn more on the subject.