- March 12, 2020
- Jeffrey A. Rubin
If you are an accident victim and in need of cash to pay bills you may qualify for a Pre Settlement loan. Assuming you qualify, most companies allow for the filling our of an online Application to apply for a PreSettlement Funding.
Most companies will request documents from your lawyer to review the merits of your case. Things they look for may include the policy amount available, severity of the injury and likelihood of recovery. The financial need of the client is not taken into consideration. It is a business decision in almost all cases.
There are 3 items to consider when trying to takeout out a Pre settlement loan.
First, the interest rate. Most PreSettlement companies charge compounded interest, usually monthly. Compounded interest is interest on top of, say, the previous months interest and principal. On the other hand, some Pre Settlement companies charge a fixed rate which does not change as time goes on.
The second thing to look for is does the Pre Settlement company charge a fee at any time during the transaction. Many Pre Settlement Funding companies charge an application, processing, underwriting or maintenance fee. On the other hand, very few charge no fees at all.
Finally, the last item to look for is the cost of incidentals. While a bank wire might cost the PreSettlement company $30, see if they charge a premium, like $140 to you, to send that wire. When you add all of these possible charges up, the loan can end up costing a lot of money.
What is the Difference between Oasis Financial, Redwood Funding, Bridgeway Legal, Covered Bridge Funding and Momentum Funding?
Call each Pre Settlement Funding company that you might be interested in getting Pre Settlement Funding from. You must ask them: 1) Do they charge fees? 2) Do they compound their interest? 3) What do they charge for a bank wire? Then you need to compare apples to apples and see who is the cheapest Pre Settlement Funding Company.
Every state has different rules as to whether ones own lawyer can lend you money. Most states prohibit the lawyer from lending money to a client. Some states allow for the lending of money in regards to incidentals like travel to a doctor. Other states allow the lending of money but not interest. You must inquire of your lawyer as to that particular states rules.
Most PreSettlement Funding companies will not advance money to an accident victim unless they have a lawyer. The lawyer will “insure” that the Pre Settlement Funding company is paid back. There is a greater risk of not being paid back with only the accident victim signing for the loan.
Most states allow for Pre Settlement Funding. Some states, like Colorado, Maryland and South Dakota forbid PreSettlement Funding. One’s own lawyer must be familiar with the states rules in regards to allowing their client to obtain Pre Settlement Funding.
What is the difference between Pre Settlement Funding, Lawsuit Funding, Legal Funding, Accident Loans, Lawsuit Finance, Lawsuit Loans etc?
No difference as it applies to the client who is borrowing.