This is basically how the pre-settlement legal funding process takes place; a client, always someone involved in an accident or injured at work, while waiting settlement, seeks a loan that will help them handle the financials of the court and treatment processes. Since they are unable to work and have to undergo treatment, this is normally a difficult time financially, especially when they are the family breadwinner. The loan process is normally given with the involvement of the client’s lawyer. However, the catch is that if the settlement falls through, then the lending company does not have their loan repaid. It is risky for the lender and advantageous for the recipient, but there are important questions to consider when applying for the loan.
How much is the interest?
The matter of interest for pre settlement funding is one that even industry experts admit is high. While the typical loan might be about 3 and 4 percent, pre-settlement loan rates are high. This is perhaps acceptable because they do not have the luxury of collateral, say, a house to foreclose on. The first thing you should be clear about is that the interests will be much higher on these loans. When inquiring about the interest, ask also about how the loans are compounded.
Are there any more application fees?
Apart from the high interest rates, ask the company about any other fees they charge on application. Most companies only charge the interest, but it pays to be sure about costs on application, and whether they can be waived.
How much should you involve your lawyer?
When making the choice of company, it is important to involve your lawyer every step of the way. Chances are that they will be experienced with some of the decisions or companies involved here. This alone makes them an important resource. However, typically, one must be represented by a lawyer if they are to be legible for a lawsuit loan.
Other questions
Other important considerations are questions of cap and conflicts of interest. Find out how they add or stop adding interest and fees, and whether the lender has financial ties to any medical provider or lawyer in the case.
The pre-settlement legal funding process does not have to be too tedious, especially when you choose a reputable company. Loan query will offer you the best rates, call us or visit the company website today.
