Same-Day Pre-Settlement Loans: Are They Legit?

Financial emergencies don’t stop after experiencing a personal injury. Your financial situation worsens in many cases, and you need money fast. If you aren’t working or don’t have good credit, a traditional bank loan may not be an option. But if you have a pending legal claim, you may be eligible for an advance to receive the funds early.

Same-day pre-settlement loans allow you to access your funds early and receive them sometimes the same day or the next business day. Understanding how pre-settlement lawsuit funding works and who is eligible is key.

What is a Same Day Pre Settlement Loan?

Same-day pre-settlement loans give you access to settlement funds before your case settles. Companies that offer these loans understand lawsuits can take months or even years, but you may need the funds now to cover necessities, especially if you cannot work.

While it has the name’ pre-settlement loan,’ it’s early access to your future settlement. The loan company works with your attorney to understand the case, including the likelihood of receiving a settlement.

How Same-Day Pre-Settlement Loans Work

To be eligible for a same-day pre-settlement loan, you must have an attorney assigned to your case, and there must be an expected settlement.

What they don’t require, unlike traditional loans, are good credit, proof of income, or even a credit check. You also don’t have to have an employer. Lenders base the approval on the case strength and the amount you need to borrow.

When you win your case, your lawyer pays back the loan company from the winnings before paying you any of the settlement.

What if I Lose my Case?

Pre-settlement loans are non-recourse. This means you must only pay back the loan if you win your case. If you lose, the lender cannot come after you for the funds. That’s why they put so much emphasis on the case itself, only accepting situations they know have a good probability of winning.

Factors to Consider

Any type of loan has risks, and you should consider the various factors that affect your lawsuit cash advance to ensure it’s the right option.

Loan Approval Speed

The name ‘same day funding’ makes you believe you’ll receive funding the day you apply, but that’s not always true. Always ask lenders how quickly they fund loans and what factors affect it. Typically, lenders have an early cutoff time and require the following for same-day funding:

• Adequate details about your lawsuit
• Completed loan application
• A lawyer ready and willing to talk to the lender

Realistically, most lenders have the funds in your bank account within 24 – 48 hours, but some lenders may offer same-day funding.

Cost

Like traditional loans, lenders have different costs for legal funding advances. Always inquire about the costs, such as:

• Application fees
• Origination fees
• Annual fees

Also, ask about interest costs. Not all lenders charge interest, and those that do often charge simple interest, but it factors into the loan’s total cost and should help you determine which loan is best. You can also use a lawsuit loan calculator to help you determine the average costs you can expect.

Loan Amount

Lawsuit loan companies take a significant risk when lending money because there’s no guarantee of repayment. They don’t have collateral, such as a house or car, to rely on if you don’t repay the loan. Plus, if you lose the loan, they don’t receive payment.

Because of this, they limit the loan amount based on the information they receive from your attorney and the general factors surrounding your case. The less money you need to borrow, the easier it is to get approved.

Repayment Terms

Typically, the repayment terms for same-day pre-settlement loans are that once the court determines the settlement, the lender gets repaid from the proceeds. However, state laws regarding the terms and regulations of pre-settlement funding vary by state. This includes interest rates, fees, and repayment terms. 

It’s important to read the fine print and understand the terms of the loan, especially if you expect your case to carry on for a while. You may want to compare options to ensure you pay the least amount of interest or fees, keeping more of your settlement for yourself.

Discussing your options with a legal professional or financial advisor is important to ensure it’s the right choice.

---

How to Get a Same Day Pre Settlement Loan

1. Complete a loan application: Most lenders have an online application you can complete. This includes your identifying information and information about the personal injury lawsuit you filed.
2. Include your attorney: Your attorney must discuss the case with the lender and provide documentation. Ensure your lawyer knows upfront that you need the loan and their role.
3. The lender and attorney talk: Your attorney must provide the important details about your case so the lender can determine if you’re approved and, if so, how much funding you can get.
4. Sign the funding contract: If approved, your lender will likely send you a contract detailing the loan amount, interest charges, and fees. It also states the loan’s terms.
5. Sign the contract: If you accept the loan terms, you and your attorney sign the loan contract. This ensures the attorney understands where the funds go after receiving the settlement.
6. Receive funding: Depending on the lender’s cutoff time and the timing of your application, you may receive funds the same day or within the next business day or two.

Advantages of Pre-Settlement Loans

Like any loan, there are good and bad sides to pre-settlement loans. Here’s what’s good about them:

• Reduces financial strain during the lawsuit: Pre-settlement funding provides access to funds while you wait for the settlement. You can use the funds however you need.
• Allows you to negotiate a larger settlement: Rather than settling quickly and taking the insurance company’s lowball offer, you can hold out for a better settlement.
• Provides income if you cannot work because of the incident: If your lawsuit is due to an injury, you may not earn an income while you recover. This loan can offset this risk.
• Flexible qualifying guidelines and no credit check needed: Most lenders don’t pull credit or consider your personal qualifying factors. They rely on the case itself to approve loans.

Disadvantages of Pre-Settlement Loans

Considering the downsides of pre-settlement funding is essential when deciding if it’s right for you.

• Added fees: Lenders don’t loan money for free. There could be upfront fees, simple or compound interest. Knowing the loan’s full cost is essential to make your decision.
• Limited funding: Every state and lender has different regulations, but you may only have access to a small percentage of the settlement amount, which may not be enough.
• Requires attorney’s participation: Your attorney must discuss your case with the lender. You can’t get funds if your attorney refuses to discuss the case with the lender.
• No guarantee: Like any loan, there is no guarantee you’ll get approved by lawsuit funding companies. It greatly depends on the likely outcome of your case.

FAQ

Final Thoughts

Experiencing a personal injury that results in a lawsuit is scary. If you aren’t able to do your normal activities, including work, you may find it challenging to make ends meet. A lawsuit loan may help you make ends meet or fund a specific expense. However, it relies on the fact that you have a good chance of winning your case.

If you don’t qualify for a same-day pre-settlement loan or don’t want to access your settlement funds early, a title loan may be an option if you own a vehicle without any loans. Contact Montana Capital today or complete a loan application to compare your options and determine which option is best.