If you have an attorney and a pending lawsuit, then a lawsuit cash advance can provide you with necessary living costs during the pendency of the lawsuit.
However, as with any loan, it makes sense to do your due diligence before diving into debt.
At Injury Wallet, we help you find the best pre-settlement loan provider with the lowest interest rates possible.
Are Pending Lawsuit Cash Advances Safe?
For the most part, pending lawsuit cash advances are much safer than a bank loan because the cash advance is paid from settlement money when your lawsuit concludes.
Plus, if you cannot fully repay the lawsuit loan, the loan funding company cannot look to you to repay the money.
There is no collateral required, and you won’t make monthly payments.
On the other hand, it is prudent to be wary of some cash advance loan companies.
They are not all created equal, and their interest rates and repayment terms can vary significantly.
How to Avoid Overpaying on Pending Lawsuit Loans
Generally, a company should be straightforward about how much they charge. If they dodge your questions, be persistent.
Their unwillingness to be transparent with you could mean they are hiding something.
Here are some other tips to ensure you’re signing a contract with a reputable company:
- Ask about the interest rate. Lawsuit loan companies are notorious for hiding their interest rates in the fine print. Ask if they can estimate the annual interest cost for you. Some loan companies charge compounded interest monthly, which can add up very quickly.
- Ask whether your attorney can be present for all meetings. It is a good sign when a loan company encourages or recommends that your attorney be a part of the process. When your attorney is absent, it is easy for a loan company to hide terms or steer you down a more expensive path. Being adamant that your attorney is present and that they review the contract before you sign could save you heartache and money down the road.
- Ask if they charge any extra fees. Most companies advertise that you can get your “cash fast” but don’t tell you the actual cost of taking out a lawsuit loan. Loan companies must make money to stay afloat, so a high-interest rate isn’t all that surprising. However, the catch may be an application fee, funding fee, and other hidden charges that offset the benefits of fast cash.
- Ask what the industry standards are for pending lawsuit loans. If a loan company representative tries to reassure you that they “abide by industry standards,” you should question what that means. In pre-settlement funding, the industry standard varies significantly among states. It could be a red flag if the loan company doesn’t elaborate on its meaning.
Also, remember that you don’t owe anything if you don’t sign a contract. If the loan company gets pushy, walk away.
Are Pre-Settlement Loans Safe, Even with Bad Credit?
Fortunately, credit score has nothing to do with the pre-settlement loan process. With the right company, a pre-settlement loan can be a lifesaver.
Take a few minutes to fill out our patented lawsuit loan questionnaire, and we’ll work on finding you the best rate.