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Settlement Loans: A Prepartory Guide

By: Brandon Howl

When you're injured, going through extensive civil litigation and you have bills to pay, it can be hard to go through life. Without any income streams, it can be difficult to make ends meet.

This is why settlement loans have become the popular financial alternative for so many plaintiffs undergoing the stresses of civil litigation.

Due to your injury, you are unable to work. When you are unable to work then the bills pile in and you see yourself in debt. You have to wait until the settlement comes in before you can do anything. In the meantime, you're relying on your rainy day fund. But why imbibe your savings when a settlement loan can do the trick?

Settlement loans are products whereby you are given a loan and in exchange the company is repaid with the proceeds of the settlement. This is in addition to hefty fees and interest charges.

Of course, like anything else in life, there is a lot more to it than that. There's more you need to know before you decide to apply for a settlement loan and sign on the dotted line.

Here are five things you need to know about settlement loans:

The Process Can be Slow

Oftentimes, the application process for settlement loans can be sluggish. When you apply to brokers, not only is it slow, but it can be costly and perhaps aggravating to your attorney. Carol Montgomery has written in-depth about how civil litigation works sometimes.

In order to avoid the snail-like endeavour, you should immediately deal with direct settlement loan firms. These companies deal specifically in settlement loans and have the team and resources to study your case, determine the likelihood of receiving a settlement and will make your lawyer a lot happier than dealing with pesky brokers who bother the attorney's office.

Seek Out Best Rates & Fees

Prior to walking through the doors of the first settlement loan facility you find, you should instead find a minimum of five settlement loan businesses. The purpose behind this initiative is to seek out the best interest rates, fees and other charges you could come face to face with.

Depending on your settlement, you really don't want to throw away a large portion of it on fees.

Two Things You Need to Know

Here are two things you need to know before you submit an application for a settlement loan:

  • How long do you think you will wait for the settlement?
  • Do you have any other money streams to pay your bills and rent?

In order to answer the first question, you first have to ask your attorney. He will likely know more about the length of time you have to wait until you see any funds from the lawsuit.

When you try to respond to the second question, you have to comb through your bank accounts, credit options and other avenues of money that you may have access to. Also, see if you could find any work-from-home opportunities to help at least pay some of your obligations.

To learn even more, you should visit the Lifeline Litigation Loans website for additional information.

Your Attorney Should Join the Process

It is likely that your attorney (unofficially) knows several settlement loan companies.

If they are not aware of any then they should still play an active part in the process. They provide you with good advice, help you get the best rates, give the establishment information pertaining to the case and other facts that can assist you in obtaining money in advance of your settlement.

Look Out for Conflict of Interest

Finally, if you wish to avoid any complications regarding the settlement of your case, you must check for conflicts of interest when you apply for a settlement. The financial lender must not have any financial ties to a medical provider, the legal team involved in your case or anybody else that may have any connection to your case.

Settlement loans can turn out to be a lifesaver, especially when you're strapped for cash.

You never know how long these types of civil litigation cases can last. They may take a few months or they might take a few years. It's hard to determine. Perhaps your case is unique.

With that being said, keep your eyes wide open as you submit an application, and pay close attention to the amount of money involved in the settlement loan. You must never borrow more than you need and you should study every word in the contract, terms of agreement and fine print.