High Rise Financial offers lawsuit loans that are very different from standard ones. To learn more, connect with our team. We can teach you about pre-settlement funding and why it does not require collateral in the same way as a traditional loan.
In This Article
How Collateral Works If You Want a Loan
Collateral is an important consideration when you weigh the pros and cons of different types of loans. If a loan requires collateral, you will need to use an asset to obtain the financing you want. If you cannot repay your loan in accordance with your lender’s terms and conditions, you risk losing this asset.
There are many types of collateral that you can provide for a loan, including:
- Real estate
- Insurance policy
- Artwork or other collectibles
Not all loans require collateral. For example, if you want a lawsuit loan, High Rise Financial can help you out. Get in touch with us, and we can answer any pre-settlement funding questions you have.
To apply for free, call (877) 735-0016
When You May Need to Use Collateral to Get a Loan
Some of the reasons why you may need to put up collateral to obtain a loan include:
1. You Want to Buy a Home
Many homebuyers use their residence as collateral for a mortgage. Initially, you may put a down payment on a home and agree to the terms and conditions of a mortgage. If you default on your mortgage, your lender keeps the money you already paid and your home.
2. You Want to Renovate Your Home
A home equity line of credit (HELOC) lets you use your home as collateral. You can use the money you already paid toward your home’s mortgage to upgrade your residence. A HELOC serves as a revolving line of credit, so you can utilize it any time you want to renovate your house.
3. You Want to Launch a Business or Get More Money for Your Company
A business loan can help you get your company off the ground or supplement your business’ finances. Inventory, land, or other collateral may be required to obtain a business loan. Once you obtain this loan, you can use it to cover various costs associated with your business.
4. You Want to Purchase a Car
An auto loan typically works the same way as a mortgage. If you buy a car, you can obtain a loan that helps you get your vehicle. Meanwhile, if you cannot pay off your loan, your lender can take your car.
Of course, if you are involved in a personal injury case or many other types of lawsuits, you may be able to get pre-settlement funding in lieu of a loan that requires collateral. Pre-settlement funding allows you to use a projected settlement to receive money while your litigation gets resolved. If you win or settle your case, money is taken out of your settlement to cover your loan amount.
Pros and Cons of Getting a Loan that Requires Collateral
A loan that requires collateral can help you get hundreds or thousands of dollars for a variety of reasons. You can lock in an interest rate with your loan that ensures you know exactly how much you will be required to pay back each month. If you pay back your loan, you may even be able to boost your credit score.
If you want a loan that requires collateral, you likely will need to complete a lengthy application. A bank or credit union may ask for information about your credit, financial, and employment histories. If you are approved for a loan, you may be required to deal with strict terms and conditions.
It is also important to remember the ramifications that come with failing to pay back a loan that requires collateral. In addition to the damage to your credit score, you lose the collateral that you put up in the first place. Thus, it is crucial to weigh the pros and cons of choosing a loan that requires collateral before you move forward with this financing option.
Alternatives to Loans that Require Collateral
Some people qualify for loans with high-interest rates that do not require any collateral. With these loans, you can obtain financing that you can use for many reasons. On the other hand, the terms and conditions of these loans tend to be stringent, and you may be forced to pay a high-interest rate to get the funding you want.
You can obtain legal funding in many states that you can use during a lawsuit. The funding requires no collateral and comes with terms and conditions that align with a plaintiff’s case. A lawsuit loan company treats every case as its own entity and provides each plaintiff with a custom pre-settlement funding quote.
A pre-settlement funding company tries to provide the lowest-possible interest rate on its loans, too. The company is upfront and honest about its loan interest rates and the terms and conditions of its pre-settlement funding options. If you have concerns or questions about pre-settlement funding, the company’s friendly, knowledgeable staff can respond to them right away.
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How to Get the Right Loan With – or Without – Collateral
It is in your best interests to explore all of the loan options available to you. By meeting with banks and credit unions, you can examine a wide range of loan options. You can evaluate loan options that both require collateral and do not require it.
If you are involved in litigation and expect a settlement down the line, keep in mind that you can pursue a lawsuit loan. You can consult with a pre-settlement funding company. From here, you can find out if you qualify for a pre-settlement loan.
High Rise Financial is happy to get you up to speed on pre-settlement funding, how it works, and its benefits. To get started, please contact us today.