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How is a Lawsuit Loan Different from a Traditional Loan? 

A traditional loan works on the principles of debt finance. For example, let’s say you borrow $100,000 from a bank to buy a house and you agree to pay 10% interest on the capital. This means you’ll pay $10,000 per year in interest. But the bank will also want some security against this loan. This is to offer protection if you cannot pay the loan back.

In the case of buying a property, the security will be against the property, so if you don’t keep up with the payments of the mortgage, the bank has the right to step in and repossess the property, which they would then sell in order to recoup their money.

In this traditional approach, you would go to the bank and ask them to lend you the money. But we all know it’s not that easy.

You have to be qualified by the bank. And banks are risk averse. So, you have to show them your credit score, your salary, your current assets and liabilities, your horoscope, etc. We are only kidding about the horoscope, but you get the idea.

Where the traditional loan providers have failed, lawsuit funding firms have stepped in and come through for personal injury victims who are short of cash.

In the case of a traditional home loan from a bank, the loan is secured against the house. In the case of a lawsuit settlement loan, the cash advance is secured through a lien on the future financial award you might win. So, if you lose the case, we will not require you to repay the money back.

As we mentioned earlier, pre-settlement funding transactions are not actually loans. The repayment only happens if the client (plaintiff) receives a favorable settlement or jury award.

How to Qualify for a Lawsuit Loan? 

To be eligible, you must have:

  • A viable personal injury claim with merit
  • Be represented by a lawyer on a contingency fee basis
  • The defendant must have the ability to pay your damages (i.e., they must be insured)

Once all these three criteria are met, you can be considered eligible.

To qualify, it must be obvious that the defendant(s) has a strong liability for causing your injuries and/or property damage. They should also be financially able to pay for those damages.

And the attorney you’ve hired for your personal injury case must be on a contingency fee basis. This means they must be compensated from the proceeds of the case only. 

Other than this, there’s nothing else you need to worry about. We can’t talk about other providers, but here at Direct Legal Funding, we don’t care if you have bad credit or you haven’t had a job for years. As long as you have a solid case and a contingency-fee-based lawyer to represent you, you’re a good candidate for lawsuit funding.

What is the Process of Obtaining a Lawsuit Settlement Loan?

Here’s what a typical process looks like:

Step 1: It all begins with an email, phone call, or website.

Most lending providers have their loan application forms listed on their websites. You can fill it out for free. You can also call them or email them to start the application process.

Next, the lawsuit advance provider will contact you to double-check that you meet the pre-qualification criteria as mentioned above.

Once they determine that you are eligible, they will then move forward and request your case details from your attorney (after getting your consent, of course). You – the plaintiff – must provide authorization for your lawyer to give us the case records.

Step 2: Your case is reviewed

The underwriters at the pre-settlement funding firm will start by examining all the documents pertaining to your case and will speak with your lawyer to address any additional issues or concerns.

During this step, we consider all the information we have collected from your lawyer, including damages, liability, and the defendant’s ability to pay. Based on everything we have, we will approve, deny, or postpone the decision (subject to further documentation/information).

Step 3: Sign the contract and take the money

If you are approved, we will send a contract to be signed by you and your lawyer. As soon as you sign this document (electronically), we will send you the funds in as little as 24 hours.

How to Improve Your Chances of Approval?

The following tips will help you ensure that your application gets approved:

Keep the Necessary Paperwork Ready: The very first step in getting your application approved is getting the requested documents on your case. Cases where the client is proactive in helping with the gathering of this paperwork, have a much higher probability of approval. Remember, this is your case. You have every right to request documents on your case file from your lawyer.

Here is the list of documents our Direct Legal Funding underwriters like to review when assessing a case:

  • Accident report, police report, or incident report
  • Medical records regarding the accident and subsequent treatment
  • Insurance coverage for the defendant
  • Cope of the lawsuit (complaint) if already filed
  • Witness statements
  • Settlement demands and settlement offers
  • Expert reports, analyses, or investigative reports
  • Pay-off information (this means any previous lawsuit loans you have received on the case)

Attorney Cooperation is Key: For us to fund your claim, we need the cooperation of your lawyer. Once you have decided to get a lawsuit settlement loan, your attorney’s participation is necessary for getting your application approved.

Here’s what your attorney must do:

  • Provide the requested documentation regarding your case
  • Answer any questions we (the loan provider) may have
  • Sign the contract (if the application is approved)

Direct Legal Funding: The Reliable Partner You Need for No-Risk Lawsuit Loans

If your case is taking longer than expected to settle or goes to trial, you may experience financial difficulties which add pressure to settle your case prematurely for less than its full value. Direct Legal Funding is here to level the playing field so you get the opportunity to settle on your own terms.

Have any questions about pre-settlement loans? Feel free to call us at 866-941-5588 or get in touch with us online. If you’ve already talked to your lawyer about it, fill out this application form and get ready to receive your advance in about 24 hours.