If you’re a plaintiff in a lawsuit and need cash right away, you may have come across a lawsuit loan calculator to understand its costs further. However, there is misinformation circulating online that these calculators do not provide accuracy at all.
First things first, an online lawsuit loan calculator is an excellent starting tool for plaintiffs looking to receive financing for their litigation. Whether you need to pay your bills or cover your medical debt, these calculators provide you with the information you need so you can have an idea about how much pre-settlement funding can cost.
Here, we will cover:
- Accuracy of Lawsuit Loan Calculators: Separating Fact from Fiction
- Legal Funding Companies: Providing Transparency in Interest Rates and Fees
- Misconceptions About Pre-Settlement Funding Interest Rates: Debunking the CFPB Claims
- Understanding Compounding Interest
- Funding Contracts: The Final Word on Your Legal Funding Details
Accuracy of Lawsuit Loan Calculators: Separating Fact from Fiction
First, let’s address the issue of accuracy. Some lenders have claimed that the information provided by lawsuit loan calculators is wildly inaccurate and cannot be verified. While it is impossible to provide the exact cost of a pre-settlement loan, reputable pre-settlement funding companies take great care to ensure that their calculators are as accurate as possible. They base their calculations on industry standards and provide estimates based on the information you provide.
Additionally, funding calculator pages makes it clear that the results are only an approximation and should not be taken as the final or definitive rates and fees.
Transparency in Interest Rates and Fees
There are some suggestions online that pre-settlement legal funding companies with calculators online are often broker companies whose only goal is to shop your case around and get you a high-interest rate. This is simply not true.
Most pre-settlement legal funding companies providing calculators as an approximation of the rates are known to be transparent, and their loan calculators are designed to help you understand the approximate costs of the funding they offer.
Misconceptions About Pre-Settlement Funding Interest Rates: Debunking the CFPB Claims
The Consumer Financial Protection Bureau (CFPB) was referenced by some lenders claiming that their findings show that the average interest rate provided by lawsuit funding company websites is misleading. However, this is not entirely accurate.
The CFPB found that some companies did not provide accurate information on their websites, but this is not true of all pre-settlement legal funding companies. Given the level of competition in the industry, the majority of lenders are working hard to remain competitive and provide better rates to their clients.
Understanding Compounding Interest
Another false claim has suggested that the price change shown on lawsuit loan calculators every six months equates to one year of interest, exponentially increasing the true APR. This is also false.
The price change shown on the calculator is simply a reflection of the interest that accrues over time, some compounding and some non-compounding. While the true APR may be higher than the initial estimate provided by the calculator, this is true of all loans in general and is not unique to legal funding. Some lawsuit funding companies will provide an APR, while others will show a 6-month trench cost of the loan.
The Final Word on Your Legal Funding Details
Pre-settlement loan calculators are valuable tools that provide plaintiffs with helpful information on the approximate costs of legal funding. Legal funding companies offering this information take great care to ensure that their calculators have an approximation of what interest rates to expect, so you can decide whether it is worth funding your case.
So, the next time you come across a pre-settlement funding calculator, don’t be afraid to use it to get an estimate of what settlement funding may cost you. Ultimately, the funding contract will provide you with the final details of your interest rate and overall cost.
The Takeaway
As mentioned above, using lawsuit loan calculators gives you an approximate idea of the costs associated with pre-settlement funding, which can help you make an intelligent decision about your funding options. However, consider funding your case with a reputable and transparent legal funding company that provides accurate information on their interest rates and fees.
Companies like Baker Street Funding prioritize transparency and provide information based on facts, ensuring that you get the lowest-cost pre-settlement funding for your needs. By working with a top rated legal funding company like Baker Street Funding, you can access the funds you need to cover your living costs while minimizing your financial risk.
We’re on your side to provide you with the best pre-settlement funding for your case. Apply today.
