5 Legal Funding Tips

No one expects to be the victim of an accident or medical malpractice. When it happens, the results can be catastrophic, from a financial standpoint as well as to one’s physical health. Legal recourse is often the path to compensation for medical bills, lost wages and pain and suffering. The problem is that litigation takes time, and many victims do not have the ability to keep up with expenses during the process.

That is where legal loans come in. A legal loan provides the funding necessary to pay bills and put food on the table until the case is settled or a jury award is rendered. There are many lawsuit funding companies today, and it’s important to weigh all the choices before selecting the best solution for your needs.

What are legal loans?

A legal loan is more like a cash advance than a traditional loan. Funding is extended based on the strength of a client’s case and repayment is not due until the case is won or a settlement is reached. On the other hand, a traditional loan typically involves an immediate repayment system that continues until the balance is paid in full.

Legal loans from reputable companies will not ask for repayment until the case is settled or a jury hands down a favorable verdict. At that time, the balance and a fee for the advance usually comes due. If the client does not win the case, they do not have to pay back their cash advance, making this a risk-free endeavor.

Applying for legal funding

The application process for lawsuit funding is much simpler than for that of a traditional loan. Most legal loans can be applied for online or over the phone. A representative for the lawsuit funding company contacts the applicant’s attorney to discuss the facts of the case, including the ability of the defendant to pay. Decisions are often available in as little as 24 hours, with funds distributed directly into the applicant’s account.

Applications for litigation funding do not hinge on credit checks or other steps usually included with a bank loan. No collateral is required and no credit card history needs to be verified. The lender also does not become directly involved in the plaintiff’s case, and only collects information necessary to determine eligibility for funding.

Weighing financing options

Some lawsuit funding companies offer a variety of terms to allow plaintiffs to customize funding to their specific needs. It is important to know the various options available to ensure you find the most convenient and affordable form of legal funding for you. For example, some types of funding might include a flat fee for the advance, while others charge a monthly interest rate. If you suspect your case will take some time to complete, the flat fee may be the better choice.

Choosing a lawsuit funding company

There are also a number of lawsuit funding companies to choose from, allowing prospective clients to compare rates and terms. It is a good idea to contact more than one company in the beginning, to get an idea of the cost of funding before submitting an application. You can also use the information you receive from different companies to negotiate your best possible rates and terms with the company you choose.

As you shop around, it is important to note that the cheapest rate may not always be the best deal for you. Some companies may charge a fee even if the case is not settled in favor of the plaintiff. Others may require applicants to jump through more hoops for approval, extending the time it takes to receive a much needed cash advance.

Understanding legal loan repayment terms

Once a company is chosen for legal funding, it is crucial to fully understand the repayment terms for the cash advance. Reputable companies do not hide additional fees or term changes in the fine print. Know exactly what the cost of the loan will be and under what circumstances the terms of the loan might change.

The nation’s leading lawsuit funding company, LawStreet Capital offers pre settlement legal loans to plaintiffs in need of financial help. Our cash advances help claimants ride out the lengthy legal process without worry over how bills will be paid. The application is free and there is no obligation to pay back the money unless you settle or win your case. Contact our helpful representatives at 1.866.FUND.662 to learn more about how legal loans can help you.