The guide below will help educate you on the positives and negatives and can guide you to make a better decision.


1. Financial Strain

The top reason that people opt for pre-settlement loans is to be able to pay their bills. Obtaining such a loan will help you to get through the time it takes for the courts to get through all the red tape. It could take months before your case is settled and by making use of a lawsuit loan, you will get the money to use while you are waiting for the outcome of your case.

2. Allows You to Wait For a Bigger Settlement

Most insurance companies will try to settle with you for the lowest amount possible and it may seem tempting at the time, but if you know that you are entitled to much more, it is better to wait for the results of the trial. If you do decide to get pre-settlement funding, you should go for a risk-free loan.

3. Source of Income When You Cannot Work

When you have become a victim of medical malpractice or any type of vehicle accident, you will most likely not be able to work if the outcome was you being disabled in some way. Insurance companies have a reputation for holding up the process for years and while you are waiting, you are not making an income, or very little. You cannot survive without money, but you will be able to take care of your bills and living costs if you do go for a lawsuit loan.

4. Income Supplement While You Look For a Job

You might be able to work but you were let go due to some sort of discrimination, and if you feel as though this happened to you, you will need to file a lawsuit against the company you worked for. At the end of the day, how you got to this point is not important, it is important that you have lost your source of income though. A lawsuit loan will help you get through this time while you are looking for another job.

5. Cheaper Than a Bank Loan

When you are looking for financial help in your time of need, the last thing that you want to do is create more debt. If you get to the point where you need a loan while you are waiting for your settlement, a bank loan will end up costing you more than a pre-settlement loan.

There is a lower risk when you choose a pre-settlement loan because of the fact that the lending company cannot take action should your lawsuit fail. This means that you will not be held liable for paying the money back if you do not win your case. There is also no interest and no monthly fees, as the company will take the risk by you having collateral. These types of loans are also not considered credit and is based on your individual case.

6. Zero Credit Checks

When you are applying for a pre-settlement loan, you will not need to have a credit check done, and you do not need to have a job either. The only thing that is required to get approval is the merits of your particular case. If you do have a strong case, you will not be denied a loan, unless you are bankrupt or you owe child support money.

7. Deal With People Who Care

It is important to find a company that cares about you and your needs. Look for a funding company that has the experience and great client reviews. When choosing a funding company, you need to find one that is a direct funding source and not one that will send you to someone else, as this will cost you more fees. You will want to go with a company that will get a fair deal for you, so do not be afraid to ask questions.

8. Peace of Mind

The best thing about getting a lawsuit loan is the fact that you will have peace of mind while you wait for the outcome of your case. Nothing is worse than staying up every night worrying about the details, or how you will cope financially. When you get this type of loan, you will know that you can go to sleep at night without having to worry about anything.


1. Extra Fees

Pre-settlement loans can be expensive and this is due to the fact that the company that is funding the money is taking a risk for you. You must take into consideration that they will not get their money back in the event that you lose your case. These companies need to safeguard themselves in some way if you do in fact lose your case.

Some of the not-so-great funding companies will go as far as charging you an origination fee, an application fee, and whatever else can, which can end up costing you loads of money. The best funding companies will review your application free of charge and they will not ask you for any upfront fees. Any and all fees should be clearly stated in your agreement before you sign it, if not, move on to a company that will do this for you.

The costs involved will be between 1.99% and 3.99% per month (compound interest). Some of the contracts will require payment annually at between 30% and 60%, and some will try and get away with 200% of the amount that they give you.

2. No Full Amounts Paid

There, unfortunately, is no way that you will receive the full amount that you are asking for with your case. Under any normal situation, you will only be able to ask for between 15% and 20% of the expected settlement amount.

3. No Going Alone!

If and when the time comes that you need to get a presettlement loan, it is highly advisable that you contact your lawyer before making any life-changing decision. They will be able to give you in-depth aliases of your financial situation. They may also try to keep you from getting this type of loan, which s why you need to communicate this with them in advance.

The Lawyer of your choice appreciates your situation its entirety, but at the end of the day, it is your choice as to who you decide to use for a lawsuit loan. You will need some assistance from a lawyer when you apply for a pre-settlement loan. Most of these agreements are clear and easy to understand, but you will still need the guidance of a lawyer who deals with these types of cases.

4. Paperwork

There are not that many forms that you will need to fill out, but you will still need to fill out a preliminary application if you wish to gain finance. The information that they will need is the basic stuff like your primary contact details, the name and number of your attorney, and so forth.

Once this has been done, the company will contact your attorney as soon as possible, requesting any information that may assist your case. Most of the insurance companies will only request basic information in order to move forward with the case.

5. The Chance You Would Not Get Approved

If you get an offer or not, you might not qualify for a lawsuit loan, as the funding companies will assess your situation before they come to any decision. They usually only approve cases where there is clear misconduct on the other party and then they will take the plaintiffs side.