Where Can I Get A Settlement Loan?

You’ve filed a lawsuit after an accident. But settlements often take years to resolve. How will you afford medical bills, attorneys, and life expenses until then? Lawsuit loans provide cash advances before cases settle.

This article covers common questions about these settlement funding options.

What is Settlement Funding?

Pre-settlement funding gives you cash before your lawsuit settles. Third-party lenders provide these advances. Then they’re paid back from settlement proceeds.

Settlement loans go by other names:

  • Lawsuit loans
  • Litigation financing
  • Settlement funding
  • Lawsuit advances

These upfront sums help cover major costs until your payout arrives:

  • Living Expenses
  • Medical Bills
  • Case Fees and Expenses

Without incoming settlement funds, many plaintiffs struggle with these piled-up bills. Cash advances ease the financial strains of waiting years seeking legal restitution.

Why Do People Get Settlement Loans?

Exactly why might you seek a legal cash advance? Here are the most common reasons:

Living Expenses

Even routine living isn’t cheap. Housing, transportation, groceries and utilities all add up. If facing reduced work hours or income loss after an accident, these costs weigh heavier.

Settlement loans help keep families financially afloat. Cash goes toward mortgages/rent, car payments, childcare, insurance premiums and everyday needs while awaiting case resolution.

Mounting Medical Bills

In personal injury cases especially, steep healthcare costs accumulate. Long after initial ER visits and hospital stays, expenses like physical therapy, medication, equipment, in-home care and more carry on for years.

Pre-settlement funding allows you to keep paying indispensable medical bills before reimbursement from settlement payouts comes through. Cash assistance keeps credit intact too.

Attorney Fees and Case Expenses

Lawyers handling accident and injury lawsuits on contingency still have plenty of upfront costs. These include hiring expert witnesses, lab testing fees, records gathering, court charges and more. Settlement loans help your attorney fund aspects necessary for building strong cases.

Where to Get Settlement Loans

If considering lawsuit loan options, where should you look first? You have several potential sources for receiving cash advances against settlement sums.

Settlement Funding Companies

Numerous companies exist solely to provide funding based on pending settlement cases. Often called pre-settlement lenders, they bank on the chance to collect repayment with interest once cases are resolved.

Here’s how getting pre-settlement loans usually works:

Application & Approval Process

You fill out an application listing your lawsuit’s details, claimed damages amount, and financial position. If approved, expect to provide various case documents as part of underwriting. You’ll sign a contract agreeing to repayment terms from any settlement.

The lender assesses if your lawsuit information merits the risk of advancing funds. If granting a loan, check disbursement often comes quite quickly after signed approval.

Costs: Fees & Interest Rates

Settlement lenders take on some risk offering these advances without guaranty of repayment. So you can expect relatively high fees and interest rates compared to alternatives like bank loans or credit cards.

Typical interests rates range from 2.5% – 5% per month. Lenders may also charge upfront origination/processing fees from 2% to 10% of the total loan value.

Lawsuit Funding Companies

Lawsuit funding companies also supply cash advances to plaintiffs with pending actions. Their non-recourse advances mean they absorb losses if your case fails. But they’ll collect hefty sums if your suit succeeds.

Here’s how lawsuit funding companies and process work:

You pay a case evaluation/application fee upfront, often from 1% to 5% of desired advance total. This covers their underwriting costs. If approved, you get a line of credit to draw from incrementally until reaching the approved cap.

The advantage here is you only pay fees/interest on sums used, not full unused credit limits. And if you lose your case, you owe nothing back despite getting upfront money.

Contingency Fee Lawyers

Already positioned to collect settlement sums, contingency fee lawyers often advance clients parts of their eventual fees pre-payout. This functions like lawsuit loan without involving a third party.

Unlike settlement lenders, most contingency lawyers don’t charge interest on cash advances. And they have added flexibility for easier repayment terms down the line if necessary. There’s an established relationship too.

Risks & Red Flags

Lawsuit loans promise easy upfront money when you need it. But like any financing, it’s wise to tread carefully before committing.

Watch for these red flags with legal cash advance companies:

Excessive Rates and Fees

Compare multiple lender rate and fee quotes. Settlement loan offers can vary wildly, with some crossing into predatory lending. Don’t commit to excessive or confusing charges. Insist all terms get communicated clearly upfront.

Company Credibility Concerns

Unfortunately, some lawsuit lenders are decidedly predatory. Check complaints, reviews, BBB ratings, and trustpilot scores before engagement. Ensureknowing full repayment obligations and what happens if your case loses.

Agreement Ambiguities

Read all legal financing contracts very closely before signing. Never proceed if rates, sums owed, or penalties for breach aren’t crystal clear. Get help from a financial advisor or lawyer if confused by terminology. Don’t accept threats if trying to back out.

Questions to Ask Before Getting Settlement Loan

If considering legal financing, ask settlement lenders these key questions:

  • What are your rates and fees exactly? Get clear totals – both percentages and sums in dollar values.
  • Do you have rate/fee caps? Make sure advocates cap how high interest charges can go over loan lifespan.
  • Does the contract include penalty clauses? Get complete fee explanations for early repayment, missed installments, or other breaks in terms.
  • What happens if I lose my case completely? Reputable companies speak honestly about non-recourse drawbacks and risks.
  • How flexible can repayment terms be if necessary? Opt for lenders open to renegotiating plans if appropriate.


Pre-settlement lending provides vital cash to plaintiffs when they most need it during trying times. If the option fits your situation, just ensure you vet lenders thoroughly. Prioritize transparent terms without loopholes before moving forward.

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