If you are ever involved in a car accident or any other personal injury incident, it may be necessary for you to file a lawsuit in order to recover damages and losses for the accident or your injuries.
Further, in addition to physical and psychological injuries, these accidents can cause significant financial stress. Your injuries may put you in a situation where you are unable to work, care for your family or take care of your bills like you did before.
In these cases, it can be incredibly straining to have to wait until the end of your case to get settlement funds. This is where a pre-settlement loan can be of great help.
What Exactly Is a Pre-Settlement Loan?
A pre-settlement loan, sometimes known as legal financing, is pretty much exactly what it sounds like. It is a loan that you can get prior to your personal injury case being settled.
The amount of the loan is determined by the value of your case. It can be used to help with your daily expenses as your case progresses, such as housing, utilities, food, and more. The terms for these types of loans vary from provider to provider, but you can expect to pay some fees and of course, interest.
Repayment of the loan occurs at the time your case is settled and your monetary distribution is completed. In most circumstances, it will be the responsibility of your attorney to make sure the loan is paid back directly out of your settlement before distributing any remaining funds to you as their client. This is part of the guarantee of the loan in the beginning.
What Is the Process?
The process for attaining a pre-settlement loan is simpler than one might think. Talking to your attorney is a good first step. They may be able to advise you whether your case is well-suited for a loan.
Further, the attorney will be involved in the loan process in some capacity from start to finish. They may be able to recommend a car accident loan company that they trust and will work well with all involved. Once you have chosen a company, they will evaluate your case to determine its value. This is how they decide what amount of a loan you may be able to get.
After the paperwork is finished and your loan contract is ready, make sure to have your attorney review it before you sign it and it’s finalized. Your attorney will be one of your best resources during the pre-settlement loan process.
Points to Consider
Pre-settlement loans can be extremely useful and may even save the day if you have been injured in a car accident and are having trouble making ends meet. They can relieve a considerable amount of stress and financial burden while you await the outcome of your personal injury case.
There are a few points to remember; however, before you decide that a pre-settlement loan is the route for you. One such point is that not all personal injury cases are eligible for these types of loan. There are many factors that go into this determination. You also must remember that although it may be helpful now, the loan will be paid back out of your settlement, which could leave you with less money later on.
All in all, pre-settlement loans are tools that may be lifesavers for those in certain situations. They can help get you through and keep you afloat until the completion of your personal injury case. Just make sure to do your due diligence to ensure that they are the right option for you when all is said and done.
Read Also: 4 Incredible Benefits of Student Loan
