More than 60,000 plaintiffs yearly obtain one, with an average funding amount of $2,500 to $5,000. With many unemployed Americans, the demand for pre-settlement funding has risen. Pre-settlement funding or legal funding sometimes is an underrated choice, but it is one way to pay for unexpected financial obligations. They can be used to fund any urgent expenses, including medical bills, transportation to work, funeral costs, rent or mortgage, business costs, and even tuition. Pre-settlement loans provide versatility when victims involved in lawsuits need to pay for essential expenses.
How does pre-settlement funding work?
The way pre-settlement funding works is by first applying with the company for a legal advance against your pending settlement proceeds. Applying is relatively simple and can be done online or over the phone.
When you apply, make sure you provide the data requested and your attorney’s contact information and ensure that your attorney provides your case file. A contingency attorney must represent you to be considered for the loan.
The timing to approve a plaintiff pre-settlement advance is 24-48 hours from the moment your lawyer provides all documentation of your claim. Upon receiving your case information, underwriting will evaluate your lawsuit and possibly contact your attorney for further questions about your case. The pre-settlement financing company will work with your attorney to give your case a fair value before approving you for the cash advance, which will be between 10-20% of the expected settlement value.
Upon approval, a contract will be generated and sent out to you and your lawyer to sign. The funds will be disbursed to you within 2-4 hours upon the full execution of the contract.
Lump sums vs. monthly installments
The funds typically issued as a lump sum deposited into your bank account, or a check could be sent to you via overnight FedEx. You can also get monthly installment payments, also known as rolling contracts, which is essentially a monthly agreed upon payment for 3-6-9 or 12 months. It helps cover expenses and lowers the interest burden of taking the full amount at once.
Case evaluation process.
48 hours max.
What you should know about pre-settlement funding costs.
Before you shop around for pre-settlement funding, there are costs you should be familiar with in order to make the best decision for your financial situation and your case:
The way pre-settlement loan interest rates work is based on a few factors, such as your litigation length and strength. The interest rate refers to the percentage of the loan that you’ll be charged each month, every three months, or every six months, and the lower the risk of your case carries, the lower your interest rate can be. Generally, the more the funding company thinks of your case as risky, the higher the interest rate will be. Pay attention to annual compounding percentage rates that quickly add up to your loan, which include the length of the pre-settlement loan’s interest rate, how much you will pay over time, as well as other fees (if applicable). It is best if you chose a company that provides non-compounding rates at no more than 3.4% per month. Avoid companies with interest rates that will charge between 50% and 200% per year. Also, depending on how risky your case is, and if your attorney requests the loan, you could receive funding with much lower interest rates than other claims that carry more risk.
Pre-settlement funding can range from $1,500 to $750,000 depending on the case, when the claim will approximately be settled and how stable your expected settlement is. Take out enough to cover what you need, but never borrow more than you need.
Always ask the company what your loan fees will be. It is very common that most lenders charge fees. This is typically a percentage of the total amount you take out of your expected settled case. Look for loans with minimal costs that will be reasonable when your lawsuit is settled. Look for fees that won’t go up over time, and that can fairly justify the rate you are given. Be careful with companies that don’t charge fees, those contracts usually have compounding rates that go up to 200% per year, and you will have to pay a lot more over time.
Some lawsuit lenders have pre-payment penalties, which are fees that you will pay if you decide to pay off the loan earlier. Avoid loans with pre-payment penalties; if you wish to pay your settlement advance before your case settles, you should be able to do so without worrying about pre-payment penalties. The good news is that prepayment penalties are not common in the pre-settlement funding industry.
Pre-settlement funding is non-recourse. That means you’ll only repay the amount you borrowed plus interest rates and fees (if applicable) when your case settles successfully. Pre-settlement funding is known for its versatility and higher interest rates than traditional loans, and companies who provide this type of funding also provide higher rates than traditional financial loans because, in the adversity that your case doesn’t successfully resolve, you will be exempt from paying back the pre-funds. This type of funding is called “non-recourse,” and it is mostly used for the basic needs — both necessary and facultative. Non-recourse pre-settlement plaintiff funding has no risks. Providers do not require income verification, monthly payments, credit history, liquid assets, or amounts of total debt, for you have to qualify for the cash advance. In other words, pre-settlement loans do not require collateral, such as your house, a car, or good credit to be approved.
Before you agree to sign a contract, you have to make sure a pre-settlement loan is right for you. Only the best companies recommend consumers to utilize their lawsuit advances on essential expenses. While Baker Street Funding does not recommend using your legal funds on many of these uses, they can technically be used to cover any number of expenses, including buying a new car to transport yourself to work, paying student loans, fixing a home, or open a new business. Remember that just because pre-settlement funding can be used for just about anything, it doesn’t mean it should be treated irresponsibly. You are obtaining money from your expected settlement, and the interest rates will add up. Pre-settlement loans should be used during specific instances of ongoing litigation, such as emergency expenses, and after you have weighed all available financial options.
Once you have decided to get funding from your litigation, you can easily apply online; Baker Street Funding can help you get your money fast and with lower interest rates.
Why Baker Street Funding?
Baker Street Funding could help you figure out if your case can qualify for funding and the approximate total amount you’ll pay on your pre-settlement loan if you get compensated. Baker Street Funding takes pride in not engaging in any hidden fees or markups and provides lower rates than other litigation funding companies; it also provides a contract match or a better funding agreement. This means that we will beat most contract prices if you show us the other lender’s agreement. Baker Street Funding’s lawsuit loans are simple and straightforward. Your interest rate will be lower than other companies, the term length will end at the 3-year cap, and there won’t be any more fees different than what you see on the contract.
With Baker Street Funding, what you will see on the contract is what you will get. So, whatever your situation might be, call us today at 888-711-3599 to speak more about your case and Get Your Legal Funds Today.