If you have the chance to receive a settlement for a legal case, then it is possible to get a loan where your settlement is collateral. This is ideal for people who are waiting for their settlement to arrive to help them pay bills, and it works by borrowing money from a lawsuit loan company and promising to pay back the loan when you receive your settlement. However, you should keep in mind that this is only for emergency situations and the interest rates could cause you to pay a lot more back than you receive from your loan, and many lawyers advise against taking out a settlement loan.
There are many great things that can accompany getting a loan against your settlement. For one, you can receive your money in advance to help pay your bills or other emergency expenses. For example, for people involved in personal injury cases, they may need this money to pay off their medical expenses, and there may be no other option when medical bills are due but to take out a loan.
Another benefit can come if you don't win your case. With most lawsuit loan companies, you don't have to pay back your loan if you don't win your case. This does not, however, mean that it is a good idea to apply for one of these loans if you don't believe you will win your case. Loan companies will only loan the money if it looks like you will win.
Other benefits include that there are no credit checks, you receive payment quickly, and because it is a cash advance, it usually won't show up on your credit report.
Along with the benefits of taking out a pre-settlement loan, there are several cons, and in most cases, they can outweigh the benefits. One of the largest disadvantages is that these loans can be very expensive to pay back. This is because fees and interest rates will accumulate while you are waiting for your settlement, which could end up costing you a large portion of your settlement. That is why it is so crucial that you only use these types of loans in emergencies, such as for surgery or medical bills or for rent if you are facing eviction.
Understanding your rights is the first step to winning your legal case. If you are involved in a legal matter, call PLM Attorneys today for your free consultation at 727-478-4125.