Lawsuit loans come with inherent risks. While they may seem like a good option if you’re strapped for cash while you wait for your personal injury claim to settle, it pays to ask questions. First, we will explain some of the risks involved in a lawsuit loan, and then explain why pre-settlement legal funding is a better option.
Find out how much you can receive in legal funding by filling out the Apply Now form.
Huge Interest Rates and Additional Costs
Lawsuit loans can have huge compound interest rates associated with them. This means the interest applies not only to the original loan amount but to the loan + interest. It’s sort of like charging interest on interest.
While it could be great if you have compound interest on a savings account, it’s bad news when it comes to a loan.
You may also have to pay an application fee and processing fee in order to apply for and receive a lawsuit loan. All of these additional costs can take a real bite out of your eventual settlement.
For a free legal consultation, call (877) 735-0016
Not all states regulate lawsuit loans. Some states are starting to put a cap on interest rates. For example, the state of Illinois passed the Non-Recourse Consumer Funding Act in 2015.
But it still allows the loan amount, interest, and fees to take up to 80% of the proceeds from your settlement. Nevada passed a law that limits interest rates and fees to 40% of the initial loan amount. For instance, if your lawsuit loan was $1,000, 40% of that is $400.
So in the end, you could end up owing $1,400. Now imagine if your loan was $10,000. 40% of that is $4,000, so you would end up owing $14,000 – and interest rates can be even higher in other states.
Pre-Settlement Legal Funding Is a Risk-Free Option
In contrast to lawsuit loans, pre-settlement legal funding with High Rise Financial is a risk-free financial solution while you wait for your personal injury case to settle. Our application and financial terms are quite different. You still have to pay us back when you win your case.
No Risk to Your Credit Rating
There is no risk to your credit rating because we do not run a credit check that would be necessary for a standard loan. Your credit rating takes a hit every time someone runs a credit check. This can be a real problem when you try and go buy a car or finance a mortgage.
No Compound Interest
Lawsuit loans can have huge compound interest rates. That means the amount you owe continues to grow the longer it takes your case to settle. With pre-settlement legal funding, we do not charge any interest.
We do charge a one-time, flat fee. In this way, you will always know the full amount you will owe when you win your case. The payback amount will never change.
Industry Best Practices
In addition, while some states do regulate pre-settlement legal funding, High Rise Financial follows industry best practices as laid out by the Alliance for Responsible Consumer Legal Funding. Our legal funding process is open and transparent. It is also free to apply.
We also won’t work with you unless you have a personal injury attorney representing you. This protects both your legal and financial interests.
If You Don’t Win, You Don’t Have to Pay
You read that right. If your case goes to court and a judge rules against you or a jury finds for the defendant, you don’t have to pay us back. You only pay us if you win your case – you are completely protected.
Apply for Risk-Free Pre-Settlement Funding Today
Pre-settlement funding is a risk-free alternative to a lawsuit loan. You will always know what you need to pay back, due to the no-interest nature of our financing terms. And again, if you don’t win your case, you don’t have to pay us back.
To find out how much cash you might qualify for, fill out the form on the Apply Now page to get started. One of our team members will get in touch with you and your lawyer shortly. If you have questions, start an online chat, or call our office at (866) 407-6404.