Personal injury cases can sometimes take many years to resolve, leaving victims short on the cash they need to stay afloat financially. Attorneys are ethically barred from loaning money to clients, so legal funding companies have stepped in to help.
There are now many providers competing to loan money to litigants with pending cases in court. Unfortunately, some of these companies prey on unsophisticated personal injury victims, fast-talking them into signing on the dotted line without giving them the information they need to make an informed decision.
Learning to choose the best pre-settlement funding companies will help you avoid less scrupulous firms that take advantage of their clients through high rates and ridiculously high fees.
A higher-rated, prestigious legal funding company can provide you with quick access to capital reasonably.
The best companies won’t pressure you into signing a contract with them, but instead, if they can’t fund your case, they’ll guide you towards the right money lender that can invest in your case.
The best lawsuit loan companies are transparent every step of the way. This is why you must understand how the best companies work.
The best lawsuit funding companies operate transparently
If you’re approached by a lawsuit funding company by mail, text, or email, you should make absolutely sure that it’s a legitimate business before you sign anything. You can avoid being a victim of fraud or misrepresentation by knowing how ethical plaintiff loan companies operate.
The best settlement loan companies want to contact your attorney
A trustworthy litigation funding company is always interested in establishing long-term relationships with lawyers and will ask to contact your attorney to set up your lawsuit cash advance.
If you’re approached by a funder that wants you to sign papers without showing them to you, say, “Next!”
Top-rated lawsuit funding companies are easy to reach
Plaintiff pre-settlement loan companies know that missing a call can lead to losing business.
That’s why a recognized company will have a live person answering the phone, and if you do need to leave a message, they call back quickly.
The funding terms are crystal clear
The entire agreement should not be more than a few pages long and printed in nothing smaller than a ten-point type.
Unscrupulous firms will try to hide extra fees in small font boilerplate pages, knowing that many people don’t bother to read the “small print.” It is very important to guard against unfavorable deals and predatory lending.
Interest rates are reasonable, with little or no compounding
If the legal funding firm wants to charge you over 41% interest, look elsewhere for a better deal. In addition to a high rate, compounding interest can drastically increase the amount of money you owe, sometimes wiping out all the proceeds of your award.
The best pre-settlement-funding companies will show you exactly how much you will owe based on when the money is repaid out of your settled case. As such, they will also provide you with a maximum of a “3 year rate cap”, which means, that even if your lawsuit settles in 5 years, you won’t be charged extra interest after the three year mark.
The best lawsuit funding company will take the risk
You should only be responsible for repaying the loan if your attorney collects money for you. If your case is dropped or dismissed, the company does not get reimbursed.
A high rated pre-settlement loan company wants to talk to you
Getting a loan from your settlement proceeds should never get you the bum’s rush. The best companies will take the time to answer your questions and address your concerns thoroughly.
Shopping for the best pre-settlement funding requires more than a few steps. But finding a company that provides an overall lower payment, simplifies your finances or enables you to only get funds for essential needs—with interest and a rate cap you can live with—can be wise.