Loans and legalities walk hand in hand! A person or victim undergoes tremendous loss when faced with a personal injury case. And here there might be financial losses and expenses that one has to pay for. It is here that the concept of lawsuit loan comes into place. It does a lot good for people. However, like everything, there are pros and cons for lawsuit loans as well. It is essential for you to know more and then decide whether to opt-in for the same or not. Try and keep your attorney involved in this decision-making process.
The victims who are waiting to get certain payments, will find a lawsuit loan to be the answer to their prayers and a quick solution to rest their financial stress. Most people define or describe this as a form of advanced funding, where cash is placed in advance to an impending settlement for the benefit of the victims. Today, you can read and learn more on this topic. You can browse online and visit website that provides useful information.
Who are the people that require a lawsuit settlement loan?
While you are researching or learning on this topic, the above-mentioned question is a vital query to have. There are lenders who at times provide lawsuit settlement loans to the plaintiffs to help with their civil rights discrimination suits and personal injury suits. Sometimes, this loan is also offered to settle their deceased family member’s estate. Do you have any personal injury case, like medical malpractice or a traffic accident? If yes, then you perhaps have to wait for a couple of months and sometimes years, before heading to the trial and get your settlement.
And in this interim, you might not be able to continue with work. And this can lead to a significant income loss. Gradually, your living costs and medical bills and other expenses might pile up. You can use your savings, but soon they will be over. And here you will require the lawsuit loan at the earliest to help with your financial crisis. Hence, it is essential that you proactively weigh and assess all the financial options you have before applying for a lawsuit settlement loan, as there are a couple of risks involved. However, with an ace attorney at hand, you can always expect the best guidance and suggestions.
The increasing rates
Usually, the lawsuit settlement loans come with a substantial interest rate. As a result of which it can take up a massive bit of the settlement capital that you owe. Additionally, the interest rates also go high and hover between 27% and 60% annually. It indicates that if you opt-in for a lawsuit loan with an amount of $30,000 then you might have to pay an interest which is close to $18,000 annually.
Also, at the end of the lawsuit loan settlement process, you might have an increased loan interest to deal with, than the original settlement amount. For instance, in the example mentioned above, it could take as much as two years for you to get the $30,000 settlement amount. And by that time, you already owe the same amount which you borrowed, and you will also have a $36,000 interest amount to repay. Even, based on the loan conditions, you will owe money. It is because the lawsuit settlement loan interest generally gets compounded every month.
It was back in the 1990s when the lawsuit firms came into existence. Then it was a brand-new concept for the financial scene. It is because of that reason the loans didn’t get regulated by the state or the federal law. The state legislatures today are giving attention to regulating these loans.
But on the other hand, lawsuit loans presently lack the same consumer regulations, as it is there for car loans or mortgages. With these limitations on the lawsuit-loan rates of interests as well as solutions, it might get challenging for the borrowers to compare it with other loans. Also, the very term differs in use from one lender to the other. In fact, some lenders term it as “settlement advance.”
Few important debating points you need to know
Taking into consideration all risks, it is hence not a surprise that such loans and settlement advances have already stirred up a few debates. For instances, you can refer to the lawsuit that got filed back in February 2017. It was Consumer Financial Protection Bureau and the attorney general of New York that alleged that a lender had scammed former NFL players and unwell Sept.11 responders, who all had experienced concussion injuries along with expensive settlement advanced. As per the verdict of the authorities, lenders had to make use of illegal tactics, which included charging exorbitant rates of interest, which went up to a whopping 250% as well as excess fees. Furthermore, the lender also collated millions on the loans granted.
Hence, there is a chance of lenders duping people with lawsuit settlement loans. The best way is to go about the process is to discuss the matter with your personal injury lawyer and conduct it all under legal guidance.
To sum it up
Are you thinking of applying for a lawsuit settlement loan? If yes, you need to weigh and assess your decision thoroughly. There are risks involved. Also, since these loans are yet to get regulated by the federal government, there can be other functional hazards.
Hence, the only solution is to join hands with a pre-settlement funding agency or company that specializes in lawsuit loans and also provide favorable loan interest rates. Today, there are several such companies present online that are willing to address the financial stress faced by the victims of a personal injury case and help them get on with the life, by providing them the cash to pay for their expenses and bills. These companies understand the problems of excess interest rate and unlawful practices. Hence it provides solutions that benefit the victims. Once you come across such a company, you can research the services and analyze the online reviews. If you find it safe and useful, you can join hands with this company.