Lawsuits can be a time-consuming and costly endeavor. A lawsuit funding company can help bridge the financial gap between the accident and the final settlement.
A good lawsuit loan company will be transparent about its interest rates and fees. They will also clearly state what types of cases they fund and have a clear payoff table on the front page of their contracts.
Flexibility
Unlike a traditional loan, a lawsuit advance requires no credit check. This is a significant benefit for plaintiffs with poor credit and needing to pay their bills while waiting for a settlement. Also, lawsuit loans do not have compounding interest rates like personal loans. This is a significant difference because compounding interest increases your debt over time.
Look for a company that offers a simple rate and does not charge fees that increase the cost of your funding. For example, a company that charges document, archiving, or servicing fees can significantly increase the cost of your lawsuit funding. An excellent legal lender will not set these fees and can quote you a special rate on your first call.
It would help if you also looked for a company that works directly with you to provide pre-settlement funding. This means they will not hire brokers or affiliates who may charge extra fees and up the overall cost of your settlement cash advance. In addition, they will work directly with your attorney to ensure that they understand your case and the likelihood of success.
Reputation
Many people find themselves in financial desperation after an accident. With defense attorneys offering pennies on the dollar for a case your attorney believes is worth much more, plaintiffs turn to litigation funding companies to get a cash advance against their future settlement or award. However, not all lawsuit funding companies are created equal. Some take advantage of plaintiffs by charging excessive rates and fees.
The first thing you should do before selecting a lawsuit funding company is to check its reputation. Look for reviews on Google Maps, Yelp, and the Better Business Bureau. It would help if you also were wary of funding companies that don’t disclose all the charges associated with a lawsuit loan. Some hidden fees include document management or archiving fees charged yearly or every time you take out a funding advance.
The best pre-settlement funding companies will always ask to speak with your attorney before advancing funds. This allows them to review the case and assess the strength of your claim. If a funding company refuses to talk directly with your lawyer, you should consider another firm.
Fees
When shopping for anything, it’s crucial to compare rates and costs. This is especially true with lawsuit funding, as you’ll want to find the lowest-cost pre-settlement funding for your needs. You must provide basic details about your case to get the best deal. This can be done quickly over the phone or online. Most companies will also ask for a copy of your attorney’s contact information.
Once all of this information is provided, the company will review it and determine a cash advance amount based on the estimated value of your claim and the likelihood that you will win your case. Then, they will present an offer to you and your attorney. If you accept the offer, a contract is signed, and the money is sent to your lawyer’s firm.
It would help if you avoided funding companies that charge compound interest. This type of interest makes your loan much more expensive than it needs to be. An excellent way to tell is by asking if they charge simple or compound interest. Simple interest is only charged on the original funds, while compounding involves assessing principal and previously accrued interest.
Only lawsuit funders that underwrite their funding can set the rate you pay, which is why it’s so important to find one with a low-rate reputation.
Time-to-Cash
Pre-settlement funding is a non-recourse type of lawsuit cash advance that means you don’t have to pay it back if you lose your case. The best litigation funding companies will process your application and deposit your money quickly so you can get the relief you need. They will also communicate with your attorney throughout the funding process to ensure all necessary information is provided.
Some companies will only fund certain types of cases or will only take a percentage at settlement, so check with the company you choose to see their rules. The best companies will also provide special interest rates on their websites and specific contracts that you can compare with other companies quotes. They will also disclose whether they charge simple or compound interest rates, and you should avoid a company that charges compound interest because it can lead to ballooning debt over time.
Ask your personal injury attorney about which pre-settlement funding companies they have worked with and which they would recommend for you. Then, check online reviews for those companies on Google Maps, Yelp, the BBB, and other established review sites to see how other plaintiffs like you have experienced them. If the company you are considering has a lot of negative reviews, it’s likely that they are either not treating their clients well or that their terms and conditions are confusing or deceptive.
