Should You Consider a Lawsuit Loan?
If you find yourself embroiled in a long and contentious legal case, the result could impact your entire life. As the plaintiff you brought the suit because you felt significantly damaged by the actions of another. The United States court system is there to right these sorts of wrongs, and you are certainly entitled to attempt to receive restitution. But how do you manage your life in the meantime? You won’t have to pay most lawyers out of pocket until you receive a settlement, but that isn’t the end of the financial conversation. You might be out of work due to injury, which is why you are bringing the suit. Or perhaps you’ve had to spend a lot of money to back up your argument, by running a study or hiring a private detective. Maybe you lost your job because of the situation, and now have to figure out how to get by until you receive your settlement. That’s where a lawsuit loan can make all the difference in the world. So should you consider a lawsuit loan?
This is a complicated issue to contend with. First off, a lawsuit loan isn’t a traditional loan. It isn’t governed by the same regulations as a bank loan, which carries both positives and negatives. On the positive side, you won’t have to put up any collateral against the loan, and a poor credit rating won’t make any difference in the lending body’s final decision. But that makes the situation incredibly risky for the lender. Because of that, they tend to compound the interest rate. The initial rate will only be around four percent, but it will compound each and every month. That means if you take a full year to settle your case and get the lender back their money, you could end up with an APR as high as 60%. That’s quite a steep price to pay for a quick influx of cash.
Another issue you should consider is whether you think you are going to win your case. Of course you hope a win is forthcoming, but keep in mind that this is the only thing that’s going to matter to a lawsuit loan company. After you fill out your application, they’ll schedule an appointment to talk to you and your attorney. They’ll have a legal expert who will want to hear all the details of your case, and then they will determine your chances of winning. The particulars of the case will also determine the size of the loan you are offered. Because a lawsuit loan is only repaid when you receive a settlement, you won’t be approved for this loan unless you have a better than average chance of winning. After that call you’ll be offered the loan, with a sum somewhere between several thousand and tens of thousands of dollars.
You might also want to look into other options in advance of accepting this type of loan. Most experts would consider this a worst case scenario sort of situation. Have you fully explored all other avenues first? Once you accept a lawsuit loan, it may actually impact the decisions you make along the way. You’ll have this loan repayment hanging over your head in addition to the lawsuit itself. You might find yourself in a plea bargain situation, where the other party wants to settle out of court. They might offer you a lowball figure, one that’s just high enough to pay off your loan and still seem attractive to you. With the lawsuit loan and interest rate in place, you could be tempted to take this offer even if it isn’t in your best interest. If you’re embroiled in a car accident lawsuit, every settlement could be enticing. But even if you have a significant piece of capital out with AnyLawsuits lawsuit loans, you must always do what is best for you in the long run. Explore any possible loans from family and friends first, so you won’t have this added pressure if at all possible.