A lawsuit loan carries a number of fees with it that you’ll need to be aware of before signing up for one. These can add to your overall repayment bill and lower the final total of your settlement that you’re able to collect. Knowing what to expect can help you better plan your finances and determine if a lawsuit loan is the right option for your needs.
Why Do Lawsuit Loans Have Fees?
Lawsuit loans aren’t actually loans and face little regulation, which means that it’s possible for lenders to offload many of the costs associated with them to borrowers. While some states have adopted regulations limiting what lenders can and can’t do, many states have not. Borrowers will have to carefully research their potential lenders to find out what they are charging, why, and what their repayment obligations are for them.
Types of Lawsuit Loan Fees
If you’re thinking of taking out a lawsuit loan, you could face the following fees:
- Application fee
- Origination fees
- Processing fees
- Funding fees (interest)
Despite these additional fees, many people still decide to take out lawsuit loans because they are the best option available. If you do decide to sign up for one, be sure to learn what kinds of fees you’ll face or you could wind up with a surprise bill by the time you obtain your settlement.
When Do I Have to Pay My Fees?
If you work with a reputable lender, you won’t have to pay for any of your fees up-front and can wait until after you’ve won your settlement. If you lose your case, then you won’t owe anything. Knowing what you’ll likely owe can help you appropriately plan for your finances once your case is over and you’ve obtained your settlement.
Do I Have to Get a Lawsuit Loan?
You don’t have to get a lawsuit loan, but many people who aren’t able to afford a lengthy legal battle choose to take one out. However, there are alternative options available to obtain the cash you need to fight for your settlement. You can try to find a company that offers legal funding, which allows you to take cash up-front for your case in a set amount and without interest fees. You might also try to secure a personal loan or may have friends or family you can turn to for help.
What Happens if I Can’t Pay for My Case?
In the worst-case scenario, if you can’t pay for your case, then you may have to settle for a lower amount than you are entitled to. Settlement cases come with many expenses that must be paid right away, and if you don’t have the money for them, the case may not proceed. For this reason, many people seek additional funding options, especially in cases where there was serious damage suffered by the plaintiff. These cases can be highly lucrative but may take years to resolve, making a loan necessary for many of these.
A lawsuit loan could be just the bridge that you need to help you cover your expenses while you wait for your settlement award. However, it’s important to know what kinds of fees will be associated with it and to shop around for the best offer before making a commitment. Exploring alternative funding options is also a good idea if you don’t think you can afford to pay for your expenses while you wait for a ruling on your settlement. Ultimately, you can find the financing that you need to fight your case if you know where to look for it and what to look for.