Settlement loans, commonly referred to as litigation finance or lawsuit loans, are a way to obtain money you need to cover legal expenses and medical bills if you’re in an accident and expect a settlement from a lawsuit, but cannot afford to wait on the funds until the case is fully settled and funds are disbursed. Typically, loans are used in the event of a personal injury case, a car accident, a workplace-related accident, or a medical malpractice incident.
There are many options for settlement loans available. In order to apply for a settlement loan, you must first file a lawsuit. Your case needs to be developed to the point where your attorney is able to give you a reasonable idea of what damages you may be awarded and how likely you would be to prevail at trial if negotiation with the other side does not produce a mutually agreeable result. As part of the application process for a settlement loan, the loan company should first be evaluating your lawsuit and the claims detailed therein to decide on their end how likely you are to prevail, and what the estimated damages will be. If you contact a litigation funding company without having taken the necessary steps in your lawsuit to understand the potential outcome, a quality funding company should tell you to wait and re-apply when you know more. If the company just processes your application without taking these reasonable factors into consideration, it’s a sign that you should look elsewhere, after first developing your case with your attorney.
If a loan company decides your case has merit and you’re likely to win enough in damages to cover your attorney’s fees and other litigation expenses and have enough left over to pay back the loan, they may award you an advance. However, while this is not a typical loan, it does come with the strings of other loans, namely interest on the advanced amount of money. Both the loan principal and interest must be paid back after the attorney’s fees and other litigation expenses are covered, before you receive any of the remaining settlement money. If the benefits of a settlement loan are right for you, it’s important to evaluate the offerings to see which suit your needs best.
As with any other loan provider, you should do your homework when researching litigation funding companies. Check online to see if the company you’re interested in has good reviews from former clients. Make sure the company has a legitimate phone number and business address and follow up with real contact. This means picking up the phone and making a call, not just interacting with the chat-bot that pops up on the website. Choosing a litigation funding company is a big decision. You wouldn’t apply for a mortgage or a car loan without doing a background check on the provider. And the amount of money at stake may be even greater in your case.
If you’ve come up with several suitable choices, it’s time to delve further into the selection process. Consider whether the companies you are choosing among have been around for a while or are new to the industry. While a more established litigation funding company may be more stable, it does not necessarily follow that they can offer a greater advanced sum or a better rate than a start-up company. Look at the factors important to you, which may include the interest rate available, the manner in which the company charges interest and fees, the level of service provided, and reviews from other clients.
Service level differs between companies, as does the available interest rate. Settlement loans start at around a 20% interest rate annually (1.67% monthly) and go up from there, because 20% interest is where the floor hovers for the loan company to be able to recoup its costs and stay in business. However, some companies charge as high as 45% annually (3.5% monthly). Others advertise a lower interest rate but tack on many extra fees that, if included in the interest rate instead, would make it higher. In addition, the advertised interest rates are annual rates, so if your case takes more than a year after you receive the initial loan advance to settle, the amount you owe will increase. Terms of a settlement loan can be capped, with a set maximum for the final amount collected by the loan company negotiated, or where the interest stops accruing after a negotiated length of time. Ask each company you’re considering how they calculate interest, and don’t be afraid to ask for examples to ensure the math adds up.
Given that settlement loans are typically expensive and not the first port of call for consumers, when doing your due diligence on finding the right company to work with, it’s best to go in with an understanding that some consumer reviews are from consumers who don’t realize at the outset what the typical interest rates and fees are in the industry. In addition, it’s best to procure a loan from a funding company that adheres to industry standards set by regulatory associations such as the American Legal Finance Association (ALFA) or Alliance for Responsible Consumer Legal Funding (ARC). Guidelines set by these associations include adherence to state and federal laws, and the inclusion of rescission clauses that allow the loan recipient to cancel an agreement without penalty or cost within a specific period of time.
If you need a lawsuit loan and don’t have other financial options, it’s worth exploring your options and evaluating them carefully. Even if the interest rate is high, the projected damages in your case may be enough to cover your attorney’s fees and the settlement loan amount plus interest and fees and leave a substantial amount left over for you. Customer testimonials for litigation funding companies attest as much. If you win $100,000 in damages, and you originally took a loan of $20,000 and have to pay it back at 40% interest, you’re paying back $28,000. If your attorney’s fees are another $40,000, you’ll still have $32,000 left over for yourself. But it is up to you to make sure you choose a reputable funding company for the best possible outcome.
If you’re a plaintiff in an active litigation and have exhausted alternative options then seeking litigation finance could help relieve financial stress. But proceed carefully and do your research. You will no doubt find Tribeca Capital Group’s lawsuit loan division; Tribeca Lawsuit Loansthe short-list.
Applying for a legal funding with Tribeca is
quick and easy, you can visit our website https://tribecalawsuitloans.com and you can chat
or call one of our knowledgeable representatives or just fill out the form and
we will do the rest. So, if you’re injured at no fault of your own and having
financial problems, then call Tribeca Lawsuit Loans today at 866-388-2288. One
of our friendly and courteous staff will explain the process and help you get
the funds you need