Our Lawsuit Loan Interest Rates
The average interest rate on our lawsuit loans is 4% per month. So, if you get a $10,000 advance, the 4% monthly interest comes out to $400 per month. If your case settles 12 months later, you will owe: $10,000 + ($400 x 12) = $14,800.
Use the lawsuit loan calculator below to see what you’re likely to owe in repayment based on the size and duration of your settlement advance.
DISCLAIMER: This calculator is based on our average lawsuit loan rate. The rate quoted here is not necessarily the rate you will pay. Because we base our rates on the strength of your lawsuit, we cannot provide you with your actual rate until we assess your case by speaking with your attorney. We invite you to apply for a lawsuit loan with Nova Legal Funding anytime. There is no fee associated with this application, and it obligates you to nothing. If you are approved for a lawsuit loan, your rate will be clearly and explicitly spelled out in the agreement that we prepare for you.
Lawsuit Loan Calculator
- No Credit Card
- No Pushy Sales Person
- Get Approved Fast
- Repay $0 If you lose
How Much Does Pre-Settlement Funding Cost?
How much pre-settlement funding costs depends on the amount you receive, the fee or interest rate applied to your advance, and how long your case takes to resolve. Unlike traditional loans, there is no single flat price for pre-settlement funding. Instead, the total cost is tied to the duration and outcome of your case.
In most cases, pre-settlement funding costs are calculated monthly. Rates across the industry typically range from 3% to 5% per month, depending on the strength of the case and the risk involved. The stronger the case and the sooner it settles, the less the funding will cost overall.
When comparing options, it’s important to look beyond just the monthly rate. Some funding companies charge application fees, processing fees, or compound interest, all of which can significantly increase the total cost. Reviewing the full agreement and speaking with your attorney can help you understand exactly how much pre-settlement funding may cost in your specific situation.
What Is the Interest Rate of a Lawsuit Loan?
If you are considering a lawsuit loan, you are probably interested in finding the lowest interest rate available. Compared to other types of lending, pre-settlement funding can be risky and carry a higher cost. However, in many instances, a lawsuit loan can actually result in a larger settlement.
It is always good to shop around for the lowest-rate settlement funding when you want to know how much lawsuit loans cost. Since the risk associated with lending money towards a legal settlement is so high, interest rates can be high. Since the return for lenders is contingent on you winning your case, they have a chance to lose out.
For example, if you apply for a $5,000 lawsuit loan with a monthly interest rate of 3% and pay it back in six months, the lender gets $5,900 from your settlement. However, their revenue is significantly lower.
Most lenders experience a loss of around 8% in addition to the cost of borrowing the capital. So for a $5,000 loan, the lender has around $472 in losses and $300 in costs. This means the total expenses for the loan are $5,772. Once the plaintiff pays back the loan with interest, the lender only makes a revenue of $128. This is one of the main reasons why interest rates for lawsuit loans can be anywhere between 1-5%.
However, keep in mind that there are companies who don’t have low interest pre settlement loans. Instead, their interest rate is usually double what reputable lenders offer. This is why we highly recommend speaking with your attorney when finding an appropriate lender.
Simple interest vs. compound interest the difference matters more than the rate
The monthly rate a lender advertises is only half the story. The other half is whether that rate compounds.
Simple interest means you pay interest only on the original amount you borrowed. If you borrow $10,000 at 4% simple interest and your case settles in 12 months, you pay $10,000 + (4% × 12 months × $10,000) = $14,800.
Compound interest means interest is calculated each month on your outstanding balance, which includes interest already owed. The same $10,000 at 4% compound interest over 12 months = $16,010. At 24 months, it becomes $25,633.
That’s a $10,000 difference on the same advertised rate over two years. Before you sign any lawsuit loan agreement, ask the lender directly: “Is this simple or compound interest?” If the answer is compound and there’s no rate cap, walk away.
Nova Legal Funding uses simple interest. Your rate, and your maximum repayment, are spelled out in writing before you sign.
| $10,000 advance | Simple 4%/mo | Compound 4%/mo |
|---|---|---|
| 6 months | $12,400 | $12,653 |
| 12 months | $14,800 | $16,010 |
| 18 months | $17,200 | $20,258 |
| 24 months | $19,600 | $25,633 |
How Does Nova Legal Funding Set Interest Rates?
At Nova Legal Funding, there are several factors we take into consideration when determining the interest rate of our pre-settlement lawsuit loans. This includes the strength of your case, where you filed the case, and the number of damages claimed.
It’s important to work with a company that takes all of the facts of your case into consideration when deciding on an interest rate. At Nova Legal Financial, our interest rates range from 1-5% depending on the overall strength of your case. We have some of the lowest rate settlement funding in the industry.
How Getting a Lawsuit Loan Can Result in a Larger Settlement
In many lawsuits, the defendant’s insurance company may try to offer lower settlements, hoping that you will take an offer out of financial desperation. They use this tactic because they know that pursuing a legal claim is costly.
Lawsuit loans can give you more time to pursue a higher settlement. Whether you need money to pay for living expenses after an injury or if you can’t keep up with legal expenses, a lawsuit loan helps keep you afloat until a trial. In most cases, if your case lawsuit risks going to trial, the defendant will offer a higher amount to settle in order to avoid going to court.
Frequently Asked Questions
What is the average interest rate on a lawsuit loan?
Industry rates typically range from 3% to 5% per month. The average across lenders is approximately 3–4% per month, which equals 36–48% annually on simple interest. Some lenders use compound interest, which increases the effective rate significantly.
Is interest on a lawsuit loan simple or compound?
It depends on the lender. Simple interest is calculated only on the original advance amount. Compound interest is calculated on the balance including previously accrued interest. Always ask before signing the difference can be thousands of dollars on a multi-year case.
Do I have to repay a lawsuit loan if I lose my case?
No. Pre-settlement funding is non-recourse, meaning you only repay if you win a settlement or judgment. If you lose, you owe nothing to the lender.
Does getting a lawsuit loan affect my credit score?
No. Lawsuit loan lenders do not check your credit and do not report to credit bureaus. Eligibility is based entirely on the strength of your case.
Can my lawyer stop me from getting a lawsuit loan?
Your attorney cannot legally prevent you from seeking pre-settlement funding. However, many attorneys have experience with lawsuit loan costs and may advise you for or against specific lenders or terms. Their input is valuable always inform your attorney before applying.
What is the most I can borrow against my settlement?
Most lenders advance between 10% and 15% of your estimated settlement value. The exact amount depends on your case and lender policy.
Are lawsuit loans regulated?
Regulation varies by state. Some states have passed specific laws governing litigation funding to ensure consumer protection and transparency. In states without specific statutes, funding companies generally operate under commercial contract law. Nova Legal Funding prioritizes transparency and adheres to all applicable state disclosure requirements.
Apply for a Lawsuit Loan Through Nova Legal Funding
We hope that our pre-settlement loan calculator has helped you during your research. Of course, if you are having difficulty paying bills during your lawsuit, consider applying for a lawsuit loan through Nova Legal Funding. We are a nationwide provider for those in need of a quick cash advance and have the lowest interest rates in the industry.
Apply online or call us at 800-760-0704 to speak with a representative. Our staff is available 24/7 to answer any of your questions about our lawsuit loans.