Applying for a lawsuit loan is the first step for securing the financial relief you need while you wait for your legal settlement. In this guide, you’ll learn what a lawsuit loan is and walk you through the step-by-step process of how to apply.

What Are Lawsuit Loans?

A lawsuit loan, also known as pre-settlement funding, is a type of cash advance provided to plaintiffs involved in personal injury lawsuits. Unlike traditional loans, repayment is contingent upon winning your case. This type of funding is designed to help cover living expenses, medical bills, and other financial obligations while you wait for your legal claim to be resolved.

Eligibility Criteria for a Lawsuit Loan

Before applying for a lawsuit loan, it’s essential to understand the basic eligibility requirements. Here’s what lenders typically look for:

Pending Lawsuit: You must have an active personal injury lawsuit or legal claim. Lenders only provide loans if there’s a pending case with potential for a settlement.
Legal Representation: You need to be represented by an attorney. Lenders require your attorney’s cooperation to assess your case.
Strong Case Potential: The stronger your case, the higher the likelihood of loan approval. Lenders are taking a risk, so they prefer cases with a high chance of success.
Type of Case: Settlement lenders tend to fund cases such as personal injury claims, medical malpractice, wrongful death, and other civil cases.

Step-by-Step Application Process for a Lawsuit Loan

Applying for a lawsuit loan involves several steps:

Step 1: Choose the Right Lawsuit Loan Company

Not all lending companies are the same, so it’s important to find one that suits your needs. Start by looking for a lender with good reviews and transparent, ethical practices. Make sure they have a clear fee structure without hidden costs. It’s also helpful to apply for a lawsuit loan with a company experienced in your specific case.

Step 2: Gather Necessary Documentation

Next, it’s time to collect those important documents related to your case for a smooth process:

Case summary
Medical records
Police reports (if applicable)
Attorney’s contact information

These documents help us evaluate your case more effectively, allowing us to move forward quickly.

Step 3: Submit Your Funding Application

Start by reaching out to your chosen lawsuit loan provider. At Baker Street Funding, we make this step simple. You can begin the process by filling out an online form or making a quick phone call. During this stage, you’ll share some basic details about your case and your attorney. Be thorough and precise in your application to prevent any delays. Remember, taking a little extra time now to be careful can save you time later.

Step 4: Authorize Contact with Your Attorney

To keep your loan application process moving forward, authorize your attorney to communicate with your lender. By doing so, your lender will be able to gather essential information regarding your case, which is imperative for accurately assessing it and determining the appropriate loan amount. Without your attorney’s approval, the application can’t move forward.

What Happens After You Apply for a Lawsuit Loan?

Once your settlement loan application is submitted, the lender will evaluate your case. This evaluation process can take anywhere from a few hours to a few days, depending on how complicated your case is and the responsiveness of your attorney. Here’s what this part of the process typically includes:

Case Review

Merits of Your Case: The first thing your lender’s underwriter will examine is the merits of your case with your attorney. They look at the evidence, the details of the incident, and any legal precedents that might impact the outcome. Strong cases with clear liability and solid evidence are more likely to be approved.
Additional Documentation: If your case requires it, your lender might ask your attorney for extra documentation or clarification. These documents may include more detailed medical records, expert testimonies, or any other evidence that could strengthen your application.
Potential Settlement Value: The company also estimates the possible settlement value. They consider factors such as the severity of your injuries, medical expenses, lost wages, and the defendant’s insurance. Generally, the loan amount is around 10% of the projected net settlement. For instance, if your case is expected to settle for $50,000, your loan approval might be around $5,000. A higher settlement can increase your chances of approval, as it offers a greater likelihood of repayment.
Timeframe to Settlement: How long is your case expected to take? Loan companies often favor cases that might settle within a reasonable timeframe. If you anticipate your case might extend over several years, lenders could be cautious due to increased risk.
Decision-Making. Based on this thorough evaluation, the lender will make a funding decision. If you get the green light, you’ll get an offer with details on how much you can borrow, the interest rate, and repayment terms. If your application is denied, the lender will likely provide a reason, giving you the opportunity to address any issues or seek funding elsewhere.

Decision-Making

Based on this thorough evaluation, the lender will make a funding decision. If you get the green light, you’ll receive an offer detailing how much you can borrow, the interest rate, and repayment terms. If your application is denied, the lender will likely provide a reason, giving you the opportunity to address any issues or seek funding elsewhere.

Understanding Loan Terms and Conditions

Got approved? Congratulations! But before you accept a lawsuit loan, take a moment to understand the terms and conditions, especially about repayment:

Interest Rates

Lawsuit loans usually come with higher interest rates than regular loans. Why? Because lenders are taking a big risk by giving you money before your case settles. That’s being said, understand exactly what the interest rate is and how it could affect your final settlement.

For example, if it’s 3% per month, you should figure out how much that totals over the loan’s life and subtract it from what you expect to settle for. Keep in mind that the amount you ultimately receive could be less than your payout.

Caps on Rates

Some lenders might offer a cap on interest rates, meaning the rate won’t increase beyond a certain point. This can provide some protection against rapidly escalating costs, especially if your case takes longer to resolve. Ask your lender if there’s a cap, and if so, what it is.

Repayment Terms

The good news is that you only need to repay a lawsuit loan if you win your legal case. Your attorney will handle the repayment directly from your settlement, covering the loan amount, interest, and any fees.

However, it’s wise to consider what happens if your settlement ends up being lower than you hoped for. In some cases, the loan might take a huge portion of your settlement, leaving you with less than anticipated. Discuss with your attorney how this could play out and whether the loan company offers any flexibility if your settlement falls short.

Non-repayment

One of the key benefits of lawsuit loans is that they are non-recourse. This means if you lose your case, you don’t have to repay the loan. However, because lawsuit loans are not regulated, you want to confirm that your funding agreement is non-recourse. Take a close look at the terms to be sure that if things don’t go your way, you won’t owe the lender anything.

Next Steps: How Baker Street Funding Can Help

Thinking about a lawsuit loan or just need more info? Baker Street Funding’s got your back. We’re committed to keeping the process transparent and simple, so you’re fully informed to make the right choice for your situation. Reach out to us today at (888) 711-3599 and start your journey towards financial relief. Remember, support is available, and you don’t have to go through this alone.