If you have been in any kind of accident, and your case is currently pending, you might be in need of some money. This often happens, especially when people have suffered injuries that prevent them from going back to work thus earning money. What’s more, these processes are not only costly, but unfortunately, can go on for months, or in some cases, for years.
If you have found yourself in this type of situation, you could apply for a personal injury lawsuit loan. This type of loan is fairly new, and it hasn’t been regulated in most countries yet, which is why you have to learn as much information about it as possible. In this article, we are going to introduce you to this kind of loan, but if you want to learn more about it and also to find out what are the requirements to apply for it, you can read more here.
You need a lawyer
The first thing that you have to do, if you are considering getting this loan, is to hire an attorney. If you do not have anyone to represent you legally, you won’t get far. No, they cannot lend you the money. Not only it doesn’t make sense, but also they wouldn’t be able to since they usually have more than one client. However, they can provide you with money to pay for additional fees that can occur. At least, this is what reputable lawyers do, but it doesn’t mean that yours will too.
In a way, the attorney is a mediator between you and the loan company. Naturally, they are not going to simply give the money to anyone. They need someone who is going to confirm all the claims in your case, and that is going to be your representative.
However, this entire process requires you to relinquish the attorney-client privilege. Taking into consideration that by doing this, you won’t have control over who is going to gain access to your records, and the fact that the job of your lawyer is to work in your best interest, don’t be surprised if they try to talk you out of it.
How does this type of loan work?
First things first, let’s discuss what types of injuries allow people to make this claim. These include car accidents, medical malpractice, premises, and product liability, and wrongful death. In most cases, you will not be required to put up any collateral, all you need is an injury settlement. As long as you can cover the loan with the money you will get for the settlement, you have good chances of being approved, regardless of your credit and overall financial situation.
When it comes to the application process, you can start it online. There are multiple loan companies you can choose between, and if you want to, you can contact several of them. When you visit the website, you will receive a form where you will have to describe your case in full detail and also add your lawyer’s contact information.
Firstly, they are going to contact your attorney, and after they have confirmed all the facts, your file will be sent to an underwriter whose job is to evaluate it. Their job is to look into similar cases and compare them with yours, find what is the average amount of money other people got through their settlements, and so on. If they learn that you probably will get enough money to pay back the loan, you will be approved for it. However, there is one thing that you should know when it comes to money. Most companies will only lend you around 20% of the estimated value of the settlement.
Are there any fees?
The next thing that most people are curious about is some hidden costs that might occur. As already mentioned, these loans are usually quite small, and since these are not regulated by the state, the interest can be quite high.
Because of this, it is of utmost importance to carefully investigate the rate of interest of all companies that you are considering. In addition, be cautious, since many of these companies will advertise that there aren’t any ‘up-front fees’. This is because they will add them to your final balance. The cost of these can either be fixed or on the other hand, calculated into the percentage of your loan. Some of these include application, processing, origination, review, and underwriting fees.
Pros and cons of this loan
Now let’s discuss some reasons why getting a personal injury lawsuit loan is a good idea, but also why it is not. First of all, as you can assume, the whole point of getting it is because it will allow you not to worry about your expenses for a while. You can use this money to pay for everything from medical bills and mortgage to rent, utility bills, groceries, and so on.
Secondly, if you are in a bad financial situation, and depend on the settlement, which can take months, this loan will not only allow you to breathe easily but also it will provide you with the opportunity to negotiate a better outcome. Just think about it. If you are in really a bad situation, you might be under the pressure to accept anything that the other side offers you.
Still, there are numerous downsides. We have already discussed interest rates, which means that these can be quite expensive. Since these rates can be double or triple of the principal you borrowed, and these cases can take a lot of time, calculate the final amount you would have to pay back.
Furthermore, not all cases are suitable for this loan. Because of this, before applying for it, and paying some of those fees, you should consult your lawyer to learn if you even meet all the requirements and will be considered.
Finally, since these loans are not controlled by the state and the law, it might be fairly difficult to find the right lender. Due to this, you have to be extra careful, do thought investigation, and ask them as many questions as you want before deciding to hire them.