The Cost Of A Lawsuit Loan: What Plaintiffs Must Know

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Cost of a lawsuit loan

Today, lawsuit funding, or settlement funding, stands to be one of the most feasible ways to obtain short-term finance during the pendency of your lawsuit. These are easy to get, are repaid subject to a favorable outcome, and come with no repayment schedules since the pay-off is a one-time event. 

The pros of lawsuit loan programs clearly outweigh those of a conventional bank loan. As a result, the utility provided by lawsuit funding programs is increasingly being recognized by people. 

If you are attempting to secure funding from your lawsuit, you should first obtain a comprehensive understanding of repayment and knowledge of the risks attached to it. Having said that, it remains of paramount importance to realize how the actual cost mechanisms of a typical lawsuit loan work. 

Risks attached to lawsuit loans

There exist no profound implications or risks coming along with lawsuit funding. You will repay the advance once your case reaches a favorable outcome and the award of damages or settlement is received. Because of this, there exists no concept of defaulting on lawsuit funding.  

If you fail to get a favorable outcome from your pending settlement, you will get to enjoy immunity from any debt or liability towards the lawsuit loan company. 

The risk for the lawsuit funding company, however, is substantial. For each case where the firm’s supported plaintiff fails, the provider in actual faces a loss. For this reason, interest rates charged in settlement funding programs are usually higher than those in conventional loans since the risk factor is more significant for the lender.

Factors impacting lawsuit loan costs

Interest rates

The only factor that tends to majorly impact a plaintiff’s decision as to which lawsuit loan company to opt for is simply the interest rate it offers. Most funding companies prefer keeping interest rates monthly rather than annual. It is better to know if the interest shall be charged in simple terms or compound over time. 

Before you sign the lawsuit loan agreement, it is always wise and beneficial to know the exact rate charged by the settlement lending company. Ask for and study well any charts and detailed calculations defining the payables summed up.

Keeping a good comparison of all interest rates they offer you and an approximate idea of the final repayable amount is essential for striking a fair deal for yourself. Therefore, to maximize the inflow of your legitimately secured award of damages, you must get yourself the best deal entailing the lowest cost pre-settlement funding. 

Policy changes by lawsuit loan companies

Moreover, inquire and consider whether the lawsuit loan interest rates are subject to change. Also, ask to what extent any future changes to the company’s policy will impact you if you were to avail funding from them today. 

Remember that the lawsuit funding industry remains largely unregulated. With that said, some settlement lenders are at liberty to charge their borrowers’ outstanding fees and costs as per their demands. 

Some pre-settlement funding companies, as per reports, have been found to charge as high as 200 percent a year, leaving absolutely nothing in the awarded pool for the plaintiffs after the case settles. 

The length of your case

It is absolutely impossible to ascertain beforehand how long your case would take to reach a decisive point. Uncertainty in the length of pending litigations rules the field here. It is the very thing that funding companies feed on due to the high risks. 

The more time it takes for your case to get concluded, the more money you lose out of your secured award or settlement. 

The best way to have a fairly rough idea of how long typical nature cases usually take is by taking an honest opinion from your attorney. 

Ensure your attorney holds proficiency in the relevant area of litigation and knows well the basics that prolong the cases.

Upfront costs and processing fees

Any upfront costs or a security deposit for that matter, are a big no when it comes to borrowing money from your lawsuit. Please make sure to read anything contained in fine print to watch out for the hidden charges.

Calculating your overall costs and finding the best deal

As seen, there is not a single factor that may easily decide the exact cost of a lawsuit loan. 

To get an idea of how much your loan will cost, you should get professional advice from your attorney in conjunction with proper assistance from the lawsuit loan company.

Baker Street Funding

Baker Street Funding is a dedicated funder, emerging as the new go-to option for plaintiffs, especially in personal injury cases. 

Our ideology vests in alleviating a plaintiffs’ financial hardship. 

Lawsuit loans vary for plaintiffs with differing lawsuits, injuries, and circumstances, along with tailor-made financing programs for plaintiffs pursuing action against severe calamities suffered by them. 

Baker Street Funding offers settlement financing charged with fixed interest rates floating at 3 percent monthly and 2 percent for attorneys. 

The interest is charged non-compounding and currently stands at the bare minimum offered by most companies as industry leaders in the US.

Moreover, no upfront fee under any label or heading is charged from the applicants as “qualifying” charges. This can be ascertained and verified from the fact that the applications are initiated through a phone call made to (888) 711-3599, which immediately qualifies the applicants for scrutiny. Realizing your cash advance against your lawsuit today was never as easier, flexible, and accessible.

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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