Do you have a lawsuit hanging over your head? Are you in need of money to keep up with bills or other expenses while waiting for the resolution of your case? Lawsuit loans are an excellent option for people who need cash quickly and don’t qualify for traditional loans.
Lawsuit loans are not like any other type of loan, they are for people who have pending lawsuits. You can borrow a large sum and pay it back after receiving your lawsuit settlement.
But before you decide on which company should lend you money, ask these 8 questions first!
Ask These 8 Questions To Find The Right Company For Lawsuit Loans
i) Do They Team-Up With Your Lawyer & Work Together?
Lawyers know a lawsuit is a tedious and lengthy process. People have to wait months, even years before they get their lawsuit settlement.
That’s why the lawsuit loan company must work with your lawyer for them to authorize your lawsuit cash advance to know all the detailed aspects of your case.
If you’ve done thorough research on any lawsuit loan companies, you should be able to verify this information by talking directly with them.
ii) Do They Offer Non-Recourse Loan?
Most loans are not non-recourse, meaning that you are obligated to repay the monies loaned to you, however, lawsuit loan companies provide lawsuit loans to you on a non-recourse basis rather than taking any security against your lawsuit. This means that if you do not receive a settlement you are not obligated to repay the money that you received in the advance. There are no risks when it comes to lawsuit funding.
One such reliable company is Direct Legal Funding which offers non-recourse lawsuit loans at no more than 2.99% interest rates with loan approval within 24 hours.
This makes them more trustworthy since they don’t take any repayment from you even if you lose your case. You must ask if the company is offering non-recourse lawsuit loans or not before you enter any agreement so that you know all your options.
iii) When Do You Need To Pay The Money Back?
This is another critical question that needs answering since there are lawsuit loans without due dates.
It means that you need to carefully check out the terms of your lawsuit loan before signing on the dotted line.
Usually, you need to pay after you get the lawsuit settlement amount, typically it’s paid by your attorney once you have received the balance of your lawsuit.
iv) What Are The Interest Rates & Fees?
One of the most critical questions that need answering is the matter of interest rates and fees. Keep in mind that these lenders want to make money too!
With a large sum of money involved in the lawsuit settlement, the lender needs compensation for taking such a significant risk. Therefore, the lawsuit loan company usually charges an interest rate of around 40% to 60% per annum on the lawsuit loans. Direct Legal Funding provides lawsuit advances at 31% per annum well below the industry standard.
Check to see if the interest is compounding or simple interest. Lawsuits often take more time to settle than expected, that is why it is important to make sure you are being charged a simple interest rate. Over the long term, you will owe much less than a compounding interest rate.
v) What Happens If My Case Drags Out For Several Years, Do I Need To Continue Paying Interest? Will The Amount Of Money I Owe Cap Out?
For most Lawsuit Funding Companies the answer will be yes, interest will continue to build up until the case settles.
One biggest of the advantages of working with Direct Legal Funding is we will cap the amount of money you will need to pay back.
Our Cap is 2 times the amount of the advance. In other words, you will never owe more than twice the amount of the money you are advanced. Even if your case takes 5 years or more to settle.
vi) Make Sure You Understand The Rates & Fees
The lawsuit loan agreement or contract should be clear and precise on all fronts.
You mustn’t sign any lawsuit loan papers until you know and understand all the terms & conditions.
Asking for help from your attorney is also a good idea since they will know more about lawsuit companies that can offer lawsuit loans if your contract isn’t up to the mark.
vii) Do They Charge A Consultation Fee?
You should be in the know when you are looking for lawsuit loan companies. Do they charge a consultation fee?
This is required if the lawsuit loan company needs additional information from you about your lawsuit.
If it isn’t mentioned in their terms of service, then ask them about it before signing any contract.
viii) Can You Reach Them Easily?
This is another crucial lawsuit loan question you need to ask before finalizing the lawsuit company.
One should consider whether or not they can easily reach out to their lawsuit cash advance company at any point should something come up.
If it’s a hassle, then it’s best to look for another lawsuit loan company since this could be a common issue, Direct Legal Funding can be reached at any time.