Business

Questions to Ask Before Applying for a Pre-Settlement Loan

When you sue someone to recover damages sustained from an accident, you have to wait until the suit is over to get your money. During the course of the case, you might be running out of money due to numerous medical bills and other expenses. Sometimes, the accident can force you to stop working, leaving you with no source of income.

The good news is you can apply for a loan as you await your suit to end. At Money First Lending, you can apply for a lawsuit loan and pay after you get your settlement from the defendant. Before you apply for a pre-settlement loan, you might have a few questions about the process.

Do I Need to Repay the Loan if I Lose the Case?

It is possible to lose a case and not get any money as a settlement. It is common practice to pay back a loan, but you are not supposed to pay back the money you borrowed in a pre-settlement loan. Legally, pre-settlement loans are not actual loans. Not all companies require you to pay back the money if you don’t win the case. By borrowing money from a reputable and reliable re-settlement financial institution, you do not have to pay back the loan if you lose your case.

How Long Will the Case Last?

This is a question you have to ask your attorney before choosing to apply for a pre-settlement loan. Your attorney will give you an estimated time when the case might end, but it is not definite. If your attorney tells you the case might take years, you can apply for the loan. If it takes a few months, you can manage to wait a little longer.

What Fees Do They Charge?

It is important to know how much the company will charge you for the money advanced to you. Different companies have different ways of charging their customers; some use monthly or annual interest rates of the principal amount while others will deduct a certain percentage from the settlement. 

Therefore, choose a company where you will be charged a one-time fee with no additional charges. Read the contract carefully, some lending companies will hide additional charges, and you might end up paying double the amount you will get a settlement. 

How Much Can I Borrow?

The amount you can borrow depends on your case’s value. The lender will go through your case and determine how much the settlement would be at the end. If the settlement is high, you can borrow a large sum of money. If other lenders have interest in the settlement, the current lender might reduce the amount you can borrow. You should also exercise financial discipline so that you do not waste money on unnecessary expenses

Do I Need to Involve My Attorney?

You must involve your attorney in the entire transaction. Your attorney has an interest in the settlement because they will deduct their fees from it. Your attorney will give important details to the lending company about your case. If a lending company does not want to involve your attorney in the transaction, you should stay away from them. 

Find a Lawsuit Lending Company

Injuries do not only disrupt your physical activities but can also put a dent in your financial well-being. As you wait for the suit to end, you still have to pay for your basic needs, and if you do not have the money, you might end up in debt. 

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