Pre-settlement loans give you cash from a lawsuit that hasn’t paid yet. You can put the money toward rent, utility bills or groceries while your lawyer works the case.
Despite the name, most aren’t loans in the usual sense. Repayment comes solely from the recovery, so you keep your savings if the case loses. This guide explains the term, how the law treats it, and when it makes sense.
Key Takeaways
- It’s cash against a pending case, paid back only from the recovery.
- Some state laws call it a purchase, not a loan. A few courts disagree.
- Hire a lawyer first. We fund once your lawsuit is filed, or a settlement agreement is in progress.
- No monthly bills, and the decision turns on the claim rather than your credit.
- The cost comes out of your share, so borrow no more than you need.
Last updated: November 5, 2026
Table of Contents
What Are Pre-Settlement Loans?
Pre-settlement loans are advances against money a lawsuit may bring in. A funder pays you part of that money before the case ends.
People call it a lawsuit loan. It’s a non-recourse advance, not a loan: if you lose, you owe nothing.
Your lawyer pays us from the settlement before passing the rest to you. If the case loses, the funder takes the loss.
You’ll see other names for the same thing: lawsuit loans, settlement loans, legal funding and pre-settlement funding. For the steps, see our pre-settlement advance explainer.
Why Do People Call Them Loans?
The word stuck because it’s simple. You get money first and pay it back later, which sounds like a loan.
But a bank loan is owed no matter what happens. You make monthly payments, and the bank can chase you if you stop.
Pre-settlement funding works the other way. Nothing comes due before the case pays out, and a lost case wipes out what’s due. Our guide to non-recourse funding covers that part in depth.
Are They Legally Loans?
It depends on the state. Some state laws define this funding as buying a slice of your possible recovery, not as lending.
Illinois is one example. Its law calls it a nonrecourse deal in which the company buys an interest in what your claim may recover.
Courts don’t all agree. In 2015, Colorado’s highest court ruled that these advances are loans under its consumer credit law.
Federal law doesn’t regulate this funding directly, a GAO report notes, but some states set rules. The rules in each state we fund are on our state-by-state page.
What a Pre-Settlement Loan Can and Can’t Do
It can keep you afloat while the case moves forward. It can also ease the pressure to settle cheaply just to cover bills.
- It can cover rent, groceries, car payments or doctor bills.
- It leaves your lawyer in charge of the case. The funder has no say in it.
- It spares you monthly payments; repayment waits for the case to pay out.
There are limits, too.
- It can’t start before there’s a case. We fund once your lawsuit is filed, or a settlement agreement is in progress.
- It won’t match what your whole claim is worth. Funders advance only part of what a case may bring.
- It isn’t free. We can’t quote a price here: it depends on the amount and how long the case runs. Your written offer shows the exact total before you sign.
Who Are They For?
This kind of funding suits some people far better than others. It tends to fit when:
- Your case is filed, your lawyer believes in it, and bills can’t wait.
- You have no cheaper way to borrow, or other credit would cost more.
- Taking an early, low offer would cost you more than the advance.
It’s a poor fit when:
- Your lawyer doubts the claim or its value.
- Your settlement is about to close, so an advance adds cost for little gain.
- Savings or help from family would cover the gap.
Our guide to funds for a pending lawsuit compares those other options side by side.
Which Cases Do We Fund?
We fund complex cases that a typical injury lawyer wouldn’t take on alone. They include claims in a mass tort (many people hurt by the same product or exposure).
We also fund abuse claims against institutions, civil rights cases and job discrimination suits. See cases we fund for each type.
Single-injury cases, like a crash or a fall, go to our sister brand, ECO Pre-Settlement Funding.
Our funding reaches cases in 41 states, and the filing court’s state counts, not where you live. Here’s how our advance on a pending lawsuit works.
What to Check Before You Sign
- The contract says non-recourse and spells out that a loss means no repayment.
- You see the total payoff in dollars at several dates.
- Every fee is named, with nothing added at payout.
- Your lawyer has read it and is comfortable with it.
Our guide to choosing a funder lists what to ask. Our rates explainer walks through what a long case does to the total.
Common Questions
Are pre-settlement loans really loans?
Not in the usual way. Repayment comes only out of the recovery, and a lost case owes nothing. Still, a few courts have treated them as loans.
Will my credit score matter?
Not for us. We weigh the claim and what your lawyer says, not your credit. There are no monthly payments to qualify for.
What if my case loses?
With non-recourse funding, the funder takes the loss and you repay nothing. Check that your contract says so in plain words.
How much does a pre-settlement loan cost?
We can’t quote a price here: it depends on the amount and how long the case runs. Your written offer shows the exact total before you sign. Compare offers by that total, not a monthly figure.
Can I get one before my lawsuit is filed?
Usually not. We fund once your lawsuit is filed, or a settlement agreement is in progress. Camp Lejeune claims filed with the Navy also count.
Ready to Explore Pre-Settlement Loans?
Is your complex case filed, with bills stacking up? Apply or call. We’ll look at the claim with your lawyer, and an offer follows in writing if it’s a fit.
Treat this guide as general information only; it isn’t legal or financial advice. America Lawsuit Loans provides non-recourse funding, and each written offer sets its own terms.
Sources
Laws, rulings and reports checked on November 5, 2026.
- How plaintiff funding works and who regulates it, U.S. Government Accountability Office.
- Definitions in the Consumer Legal Funding Act, Illinois General Assembly.
- Ruling that these advances are loans, Colorado Supreme Court, 2015.
