How To Borrow Money Against Your Pending Lawsuit?

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Borrow Money Against Lawsuit

Did you know that the timeline for a personal injury lawsuit can vary widely, often ranging from six months to as long as two to three years? Now, consider this: every second you wait for your settlement is a second that’s costing you—both financially and emotionally.

If you are caught in the middle of a lawsuit and are asking yourself, “Can I borrow money from my settlement to ease my financial burden?”, you’re certainly not alone in this. Thousands of victims ask themselves this very question. Thankfully, lawsuit loans or legal funding let you access a portion of your future settlement to provide you with more than just financial relief but peace of mind as well.

Can I borrow money from my lawsuit?

Yes, you can borrow money from your pending lawsuit if your case is strong enough to win and you have an attorney. It’s a non-recourse cash advance against your settlement where the lawsuit itself secures the loan.

Think of it this way: Rather than waiting for your case to resolve, which can take months or even years, a pre-settlement cash advance gives you immediate financial support. It’s the financial bridge that helps you get from today’s needs to tomorrow’s settlement.

Steps for responsible lawsuit loan borrowing.

Pre-settlement funding companies have a multi-step process that demands careful consideration. If your case has merits, you’re likely to get approved, often within 24 – 48 hours.

  1. Start with a Heart-to-Heart with Your Attorney. Before you even consider applying for a lawsuit loan, your first step should be a heart-to-heart with your attorney. Your lawyer can offer personalized advice that could be the difference between a smooth borrowing process and a complicated one. Just a heads-up: you’ll need your attorney’s cooperation to be considered for a pre-settlement loan.
  2. Shop Around for Your Ideal Funding Provider. Not all lenders are created equal. Some might entice you with low rates but compound them and hide fees in the fine print. Others might boast excellent customer reviews but offer higher rates. It’s essential to shop around, just like you would for a car, to find a lender that best suits your financial situation and case specifics.
  3. Dive Into the Pre-Settlement Funding Application Process. The application process is your first step toward securing pre-settlement funding. It’s usually simple—just fill out an online form and provide basic details about your case and yourself. But here’s a pro tip: Keep your attorney in the loop. Your lawyer can speed up the borrowing process by directly communicating with the legal funding company.
  4. Hand Over the Essential Case Documents. Your attorney will need to submit a variety of documents, from police reports to medical records. This helps the lawsuit loan company decide if your case is a good fit for the loan, just like a resume does in a job interview. Don’t worry—submitting your case file doesn’t break attorney-client privilege.
  5. Get Ready for the 24-Hour Evaluation. Once your documents are in, the legal funding company will take a few business days to look over your case. This is the stage where they evaluate the strength and potential value of your case to determine your borrowing eligibility. It’s an assessment that goes beyond just the facts; it considers the likely outcome and potential settlement amount of your lawsuit.
  6. Seal the Deal with Your Signature. If all goes well, you and your attorney will receive a legal funding contract to sign. And here’s the best part: Once that’s done, you could have a lump sum of cash in your bank account within 24 hours. This money is yours to use as you see fit—whether it’s for medical bills, daily living expenses, or even a much-needed car repair.

What Happens When It’s Time to Repay?

When your case reaches a settlement, your attorney is the one who receives the payment. Generally, lawyers first tackle any existing liens or financial obligations tied to your case. Our funding stands as the final lien to be settled. Your attorney takes care of this, so you don’t have to lift a finger. The remaining amount after all liens are paid goes directly to you. 

Ready to borrow money from your pending legal claim?

Baker Street Funding offers lawsuit loans from $1,500 to $2,000,000, with cash sent directly to you within hours of approval. Use it as you see fit, and repay only when you receive your settlement. The support you deserve is just a click away.

Pre-settlement lawsuit funding

Debunking common myths—is borrowing against a pending lawsuit risky?

There is a common misunderstanding that settlement loans are high-risk financial options like payday loans or bank loans. They’re not. Borrowing from an expected settlement is not the same as borrowing from a bank, and it is certainly not a gamble. 

In fact, they’re not even technically loans in the traditional sense. You see, traditional loans require you to pay back the borrowed amount regardless of your circumstances. But with lawsuit funding, as we mentioned earlier, you only repay if you win your legal case. That’s right, it’s a non-recourse loan, which means no win, no repayment.

Your Case is Your Credit

When you apply for a traditional loan, financial institutions dig deep into your credit score, income, and even your job stability. This is how they assess their risk in lending to you. 

Lawsuit loans, on the other hand, operate on a different metric altogether. Instead of diving deep into your financial history, lawsuit loan providers look at your potential to receive financial compensation through the case merits and weaknesses to determine approval.

Why This Matters to You

The answer is simple: a lawsuit settlement loan is a borrowing option that can help you get back on your feet after an injury while your case is pending. Consider a situation where one is unable to work due to serious injuries. A traditional loan might be out of reach if your credit rating took a hit. But a settlement loan can help you financially until you get your settlement money.

The Fine Print—It’s Not “Free Money”

You might be tempted to think, “So, if I lose, I don’t pay back. It’s free money, right?” Not so fast. While it’s true you don’t have to pay back if you lose, remember that if you win, the repayment will come out of your settlement. And this repayment amount includes fees and interest, which vary from provider to provider. So, it’s not “free money” but rather a calculated risk you take to assist in managing your finances while you await your settlement.

In a nutshell, a lawsuit loan is not your everyday loan. It’s a specialized financial instrument designed to help you borrow the money you need when you’re most vulnerable, using your pending settlement proceeds as collateral. It’s like comparing apples to oranges; both are fruit, but they serve different needs and tastes.

What makes your case qualify for legal funding?

When you’re in the midst of a legal battle, the idea of borrowing against your personal injury lawsuit might sound like a lifesaver at the moment. However, understanding that not all lawsuits are the same in the eyes of settlement lenders or lawsuit funding companies can offer a perspective on your chances of getting legal finance.

Types of lawsuits you can borrow from.

Lawsuits that generally qualify for loans are those with severe injuries or significant damages. These cases often have higher settlement amounts, making them more attractive for lawsuit lending companies.

Winning potential and case evidence—the cornerstones of pre-settlement funding.

Now, let’s address the elephant in the room: What do you actually need to qualify? You might think that having a pending lawsuit with severe injuries is enough to get a settlement advance, but there’s more to it. Your case needs to have a strong likelihood of winning, backed by substantial evidence. This is what pre-settlement funding companies look at to assess the risk involved in letting you borrow against your settlement through them.

Another key factor is the estimated value of your case.

Generally, the case has to be worth over $50,000. Why the specific number? It’s a risk assessment measure. Lawsuit lenders want to ensure that the settlement amount will be sufficient to cover what you borrowed and still leave you with a fair share. For this reason, they’ll provide you with up to 20% of what your case is worth. They want to make sure that once the loan and any other fees are paid off, you still walk away with a fair amount from your settlement. Furthermore, having any tax liens, child support liens, or bankruptcy liens can potentially work against you depending on how much you owe.

Legal representation is a non-negotiable requirement.

If you’re asking yourself, “How can I get a loan from my lawsuit without an attorney?” the answer is you can’t. Having an attorney adds credibility to your case and is a requirement for most lawsuit loan companies.

As noted, your attorney is responsible for repaying the borrowed amount from your actual settlement, as it goes on a lien against the payout.

Why the defendant’s insurance matters more than you think.

You might not have considered this, but the defendant’s insurance coverage plays a major role in your eligibility for a lawsuit loan because it is the source of your eventual settlement. That’s why pre-settlement funding companies require confirmation that the defendant has sufficient insurance to cover the settlement and, consequently, repay the lawsuit cash advance. If the defendant is underinsured or uninsured, it increases the risk for the legal funding company, making it less likely to qualify.

Your state regulation is an important aspect of your lawsuit loan approval.

The state you live in has an impact on approval or denial. Some lawsuit loan companies operate only in specific states due to legal restrictions. Make sure the lending company you’re considering borrowing from can fund cases in your state.

The stage of your lawsuit might be a determining factor.

Last but not least, the stage of your lawsuit can also be a determining factor. Some funding providers prefer cases that have moved beyond certain legal milestones, like the filing of a formal complaint or the completion of discovery. 

Need cash fast? Make sure you pick a lender that delivers quickly. Choose Baker Street Funding for same-day settlement loans and skip the 5-business-day wait you’d face with other companies. 

Loans on pending lawsuits

Learn the pros and cons before taking the plunge.

A pre-settlement loan can be an easy way to get cash in hand when you need it, but it is not a one-size-fits-all solution. To help you make the most of the positive features while steering clear of the pitfalls, take the time to understand both the benefits and risks involved.

The Upside of Lawsuit Loans

Time is a luxury you can’t afford to waste when you’re a plaintiff in a lawsuit. Every day you wait for your settlement is another day that your financial situation worsens. Lawsuit loans offer a timely solution that lets you borrow money against your settlement to regain control of your life. One of the standout advantages? You only pay back if your case is successful.

This financial cushion empowers you to hold out for a fair settlement. Instead of feeling pressured to accept a less-than-favorable settlement to make ends meet, you can afford to wait for a more just outcome.

Take, for instance, a construction worker who falls from a scaffolding due to inadequate safety measures. Faced with mounting hospital bills, lost wages, and living expenses, he could get a pre-settlement loan to cover those expenses right away. The borrowed funds allowed him to pursue justice, free from the added stress of financial ruin.

The Downside You Should Know

While legal funding provides a quick financial boost, it comes with its own set of drawbacks. Interest rates for lawsuit loans are generally higher than those of traditional banks, with an average APR of around 60% per year for most companies. Ideal costs don’t exceed an annual rate  (APR) of 41%.

Additionally, after legal fees and loan repayment, you may find that your final settlement amount is less than you initially anticipated. Moreover, you’re generally limited to borrowing up to 10-20% of your expected settlement. Some states even have legal restrictions on lawsuit loans, making them off-limits for residents.

It’s also easy to fall into the trap of over-borrowing due to the non-recourse nature of these loans. To illustrate, if you borrow $20,000 against a pending $50,000 settlement with a 30% interest rate, you’d owe $26,000 a year later. Add with $10,000 in legal fees, and you’d need a settlement of at least $36,000 just to break even.

That said, if you catch yourself thinking, “Should I borrow money against my lawsuit, or should I wait for my settlement money?” Remember that the answer isn’t a simple yes or no. It requires a thoughtful decision based on a well-rounded understanding of what’s at stake according to your case’s net value.

The real deal on interest rates.

Wondering what you’ll pay in interest rates? There’s no universal formula for this. When you’re looking to borrow money from your settlement, your rate hinges on several factors, like the value of your lawsuit, your attorney’s experience, the funding amount, and when you’re likely to settle.

  • The Lowdown on Rates. Monthly rates can swing from as low as 2.95% to a staggering 5% compounding. If you’re planning on borrowing money against your case, partnering with a reputable legal funding company like Baker Street Funding can secure you a lower fixed rate.
  • The Baker Street Funding Difference. Our research shows that the average APR for a 12-month lawsuit loan is around 60%—way above what it should be. That’s why many savvy borrowers turn to us to refinance their previous advances. With Baker Street Funding, you can expect transparent contracts and rates between 2.95% and 3.4% per month, non-compounding.
  • Fixed Rates, No Surprises. If another company claims to offer you a better rate, let us take a look. Chances are, they’re offering a compounding rate that could exploit your compensation amount. We pride ourselves on providing fixed rates, so what you see is what you get—for the life of the loan ending in the third year.

So, before you sign on the dotted line, make sure you’re fully aware of what you’re committing to. With Baker Street Funding, you can rest easy knowing you’re in good hands.

The inside scoop on fees.

Now that you’re well-versed in interest rate cost on lawsuit loans, let’s dive into another crucial aspect—fees.

Upfront Fees

First things first, let’s get this out of the way: upfront fees are a no-go. If a lawsuit funding company asks you for money upfront, consider it a red flag. Why? Because reputable companies like Baker Street Funding don’t ask for a dime until you receive your settlement. Remember, these aren’t conventional loans; you shouldn’t be paying anything upfront.

Origination Fees

Origination fees can be a sneaky way for some companies to add to your costs—but not all. In fact, some companies that charge modest origination fees actually offer lower, non-compounding interest rates, making the total loan cost lower than other lenders. These one-time charges should be on the low end and are deducted from your loan amount once your financial settlement pays out.

Other Fees to Watch Out For

  • Application Fees. Some loan companies charge just to apply, even if you’re not approved.
  • Late Fee. If your case takes longer to settle, some lenders may charge late fees.
  • Processing Fees. These are fees for handling paperwork or other administrative tasks.
  • Prepayment Penalties. Believe it or not, some companies charge you for paying back early.

Considering borrowing money against your lawsuit settlement? Here is how to make the right choice.

Selecting a lawsuit loan company is like choosing a personal injury lawyer for your case. You wouldn’t go with the first name that pops up, would you? The same principle applies to pre-settlement funding. While some companies, like Baker Street Funding, adhere to industry standards and regulations, others might not have your financial well-being in mind. Here’s what to look out for:

Warning Signs to Keep on Your Radar

  • Feeling rushed to sign on the dotted line? Red flag.
  • Hidden fees or murky terms? Another red flag.
  • Rates soaring above 41% per year? You guessed it—red flag.
  • The lawsuit funding company’s leadership have a sketchy background? That’s a big no.
  • They simply refuse to show you the whole contract after approval. Run away, far away and don’t pick up their calls!

If any of these warning signs pop up, you’re likely dealing with a predatory lender. And remember, if something sounds too good to be true, it probably is.

Your Checklist for a Prudent Decision

Look for lenders who have a track record of providing good customer service. Do your research and read reviews from previous clients to get a better understanding of their reputation. Also, consider the interest rates. Choose non-compounding rates with a 2-3 year capped rate. This protects you from quickly accumulating interest. 

Additionally, make sure to choose a funding company that can provide quick approval. Time waits for no one, especially when you’re dealing with personal injury litigation. Choose a company that can give you a quick yes or no. Remember to carefully review the terms and conditions of the loan before signing any agreements. Be wary of hidden fees or penalties, and make sure to ask any questions you may have before committing to a lender.

Armed with this checklist, you’re now better equipped to understand your borrowing options. However, you might still find yourself at a make-or-break moment. One path leads to reputable companies that have your best interests at heart, and the other? Well, let’s just say it’s filled with hidden traps. 

So, how do you make the right choice? Simple—by being informed, vigilant, and comparing your pre-settlement funding options. 

Let’s talk numbers—how much should you actually borrow from your settlement?

If you’re asking yourself how much you should borrow from your case, you’re not just looking for quick cash; you’re seeking to make a sound financial decision until your settlement comes through. Let’s take a look at some important factors that can help you determine how much cash you should take out of your case.

The ‘Why’ Before the ‘How Much’

Before even thinking about numbers, pinpoint why you need this loan. Is it for immediate medical bills, keeping the lights on at home, or perhaps both? Knowing your ‘why’ helps you figure out your ‘how much.’

The Bare Necessities

When it comes to borrowing money from your anticipated settlement, less is often more. Aim for the minimum amount that covers your immediate basic needs. This strategy not only keeps your loan amount lower but also leaves room in your lawsuit for future borrowing—should another emergency arise.

The Future is Uncertain, Plan Accordingly

Lawsuits are unpredictable. While you might be optimistic about a large settlement, it’s wise to be conservative in your borrowing. Keep in mind that the less you borrow, the more of your future settlement you get to keep.

Borrow Wisely, Add More Later

Don’t forget, lawsuit loans aren’t free—they’re a financial tool that comes with interest rates and fees. While they can be your safety net today, keeping your borrowing at the minimum, keeps the costs low. Here’s the golden rule: Take what you need now, and if life throws another curveball your way, you have the flexibility to borrow more money later.

The takeaway

Whenever you find yourself contemplating whether you can borrow from your lawsuit, know that the answer is a resounding yes, but with its own set of rules, considerations, and risks. Choosing a reputable lender like Baker Street Funding, understanding the terms, and always consulting your attorney can make your financial assistance not just a possibility but within reach.

What does that mean?

It means that a lawsuit-based loan from Baker Street Funding can indeed be the difference between keeping your life on track and falling into a financial abyss. Borrow smart—with a little more ease and a lot less stress. Our team is highly trained in guiding you to borrow only what you genuinely need—no more, no less.

Want to lower your rate from a different lawsuit funding company? Consolidate your previous loan with Baker Street Funding. With our additional lawsuit financing option, you can save money on your settlement.

So, ready to make a smart move? Apply for settlement funding today and experience the difference we can make in your life. With Baker Street Funding, you’re not just borrowing; you’re investing in your future without the financial hazards.


Where can I get a loan on my settlement?

Settlement loans are available through specialized lawsuit funding companies that offer financial assistance to plaintiffs awaiting a legal settlement. These companies evaluate the merits of your case to determine the amount you could qualify for as a cash advance. Use it as you see fit, and repay only when you secure your accident lawsuit settlement.

Can I get a cash advance directly from my attorney?

No, attorneys are generally prohibited from offering financial advances against prospective settlements. This is precisely the gap that lawsuit loans are designed to fill to give you the financial help you need when you can’t get it from your lawyer.

How much money can I borrow in pre-settlement funding?

The amount you can borrow varies from one legal funding company to another. Typically, the range starts at about $1,500. Some companies offer as low as $500 and go up to $2,000,000. If you need an amount smaller than $500, you might find quicker solutions through personal networks like friends and family.

How is my borrowing amount calculated for my lawsuit?

Your loan amount isn’t pulled out of thin air. It’s calculated based on several factors. These include the severity of your injuries, insurance coverage limits, and the current status of your lawsuit. For example, if you have a strong case with severe injuries and substantial evidence, you’re likely to qualify for a higher loan amount.

How long do I have to pay back the cash advance?

The time you have to repay a loan against your settlement varies depending on the lender. With Baker Street Funding, the responsibility for repayment falls on your attorney, who will handle it after your case settles.

Are there penalties for an early funding payoff?

No, Baker Street Funding does not charge any penalties for early repayment. This means you have the flexibility to pay back the loan as soon as you’re able, without any additional costs.

At Baker Street Funding, we give you the inside scoop on pre-settlement funding by covering a variety of ... financing and legal topics to help you made the best financial decision for you and for your case. Our experts break down complex ideas in a way that's easy to understand so you can stay informed on current trends as well as tips and fact checked information by the CEO and founder, Daniel Digiaimo. Furthermore, Despite its name, consumer legal funding is not a loan. If you don't win your case, no payment needs to be made back. To avoid confusion and simplify matters on, we'll use the word "loan" throughout this article.

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