5 Things You Didn’t Know About Non-Recourse Loans

Jacky Gale | October 5th, 2018

There are lots of different types of loans, and at least one of them doesn’t actually behave much like a loan at all. It’s called a non-recourse loan, and it can be a good option for people who have filed a personal injury lawsuit and are awaiting the resolution of their case. The civil court system is often an effective way to recover compensation for your medical expenses, lost wages, and pain and suffering caused by someone else’s negligence or recklessness. But it can take a long time to see a check, and in the meantime, you might be struggling to make ends meet—especially if your injury caused you to miss work or lose your job entirely. If this situation sounds familiar to you, it’s time to learn more about non-recourse loans.

Non-recourse loans are more like a cash advance

A non-recourse loan is secured by collateral. In the case of a personal injury lawsuit, the collateral is the promise of a future jury award or settlement. However, unlike recourse loans, the lender cannot demand repayment beyond that collateral. That means that if you lose your case, you don’t pay a dime back. There’s absolutely no risk to you.

Non-recourse loans don’t require a credit check

One of the major differences between recourse and non-recourse loans, other than the no-risk nature of non-recourse loans, is that there’s no credit check required. In fact, the lender doesn’t even need to verify that you’re employed. It doesn’t matter what your credit score is, what your credit history looks like, or even whether you’ve gone through a bankruptcy. The main factor in determining your approval for a loan is the lawsuit itself. The lender will contact your attorney to get a sense of the strength of your personal injury case and the damages involved. The information about your legal case is the primary way that lenders decide whether to offer a non-recourse loan.

You can decide how much of the cash advance to accept

Once your application for a non-recourse loan is approved, you’ll be informed of how much money you’ve been approved for. This figure could be anywhere from $500 to $2 million. But you don’t have to accept the total amount if you don’t need that much. If you’ve been approved for $100,000 and you only need a $50,000 advance, then you can only accept that much.

You can qualify for financial help even after your lawsuit is resolved

Personal injury plaintiffs often turn to pre-settlement loans for financial help while their case is pending. But if your case has already been settled and you’re receiving structured payments over time, you might still benefit from a non-recourse lawsuit loan. As an example, you might need to undergo a surgery long after your initial date of injury. Your regular payments might not cover your medical costs. But with a non-recourse loan, you can receive a lump sum payment now to take care of today’s expenses.

You can get transparent terms at LawStreet Capital

Even after learning more about non-recourse loans, you might still not know how to get started. LawStreet Capital makes it easy to apply—just fill out the quick form on the website or call a helpful representative at 888-567-4436. LawStreet Capital sets itself apart in the legal funding industry by offering transparent terms with no hidden fees and no surprises. Remember that there’s never any risk to you. If you don’t win your personal injury lawsuit, you’ll pay nothing back.


  1. Investopedia, What is the difference between a non-recourse loan and a recourse loan? https://www.investopedia.com/ask/answers/08/nonrecourse-loan-vs-recourse-loan.asp
  2. Credit Sesame, Everything You Need to Know About Recourse & Non-Recourse Loans, https://www.creditsesame.com/blog/loans/guide-recourse-non-recourse-loans/