How Do Pre-Settlement Lawsuit Loans Work?

What is a pre-settlement lawsuit loan?

A pre-settlement lawsuit loan is also known as a lawsuit advance. The loan is given to a plaintiff to pay expenses incurred during a legal process. The lawsuit loan is not an actual loan because you don’t have to pay back. Although it’s a safe loan, it may experience some risks if not well evaluated. You should get the following information.

Application charges

While some companies offer free applications, others have charges. Evaluate the lending companies to know which one to select through the attorney’s help. Consider the approval time and whether they complete the necessary paperwork to make your work easier.


Interest rates

Inquire about the interest rates before choosing a lender. Choose a company that offers low flat fee financing with no compound interest. A never compounded loan is better because you will only need to pay the flat interest rate. Check whether the lender offers a discount on cases resolved within a short period.

Lending company

There are many lending companies in the market, and it is essential to consider various factors before choosing one. Choose a lending company that is licensed and registered to operate. Consider the company’s expertise and experience. With this information, you will choose a reliable lending company.

How do pre-settlement lawsuit loans work?

The first step of applying a pre-settlement lawsuit loan is to file a lawsuit in court—liaise with your attorney to understand the state law requirement when applying for the loan. Besides, do your research for more information and clarification concerning the process. The lending company will contact the lawyer to gather information about the case for evaluation. You will also get a phone call interview with the company. The lender evaluates the type of case to determine the lawsuit funding and how long it will take for approval. It is easier to get a loan for a car accident because these cases are well-documented and have reliable evidence such as the police report.

After the lending company has approved the application, it evaluates the advance amount. The amount to receive is determined by the estimated value of your legal claim and your cash requirements. You will get the lawsuit loan immediately after signing the final agreement approval. The transaction process is between 24 and 48 hours. A 1/3 of the loan amount is the attorney fee, which means you will receive 2/3 of the whole amount.

In the event of winning the case and recover proceeds by court order or settlement, the plaintiff pays the lending company the principal amount and interest rate as agreed on the written document. Take your time and understand the terms and conditions of the payment. When you lose the case, you will not incur any losses because the lender will not ask for loan payment.


  • An individual can cover their living expenses with a lawsuit loan, such as car loan payments, medical bills, and mortgage payments during a lawsuit process. You will have peace of mind during the legal claim process when your needs are met.
  • A lawsuit fund can help you take more time to get a fair settlement offer. When your financial obligations are met, it will be easy for you and your attorney to negotiate with the defendant for better results.


  • The interest rates of lawsuit loans are expensive and lie between 27% and 60% annually. When your case is prolonged, you can end up paying more than the loan you took. The fee and interest payments can double or triple the amount you borrowed.

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending Articles

Find a Lawyer   /   Ask a Question   /   Articles   /   About    Contact  

© Copyright 2022 | Attorney at Law Magazine | Privacy Policy