Because plaintiff funding is a relatively new industry there is a gap in consumer knowledge. The issue is made worse when lawsuit settlement advances are conflated with traditional personal loans. They are not the same. This has resulted in the public being misinformed, leaving room for companies to take advantage of unsuspecting plaintiffs and their attorneys.
Like anything else, the key to getting a fair deal on a cash advance on a pending lawsuit is knowing the ins and outs of the process before you apply.
This post will show you how to…
- Get the full amount of cash you need against your pending settlement
- Get the lowest lawsuit loan interest rate possible
- Secure a pending lawsuit loan without upsetting your lawyer
- Get your cash as fast as possible
- No Credit Card
- No Pushy Sales Person
- Get Approved Fast
- Repay $0 If you lose
8 Tips for Getting a Cash Advance on Pending Lawsuit
1: Many companies are not direct in explaining the cost of the lawsuit loans they offer.
**TIP: Always ask what the interest rate is. When a company charges high rates, they are less likely to be straightforward with you when you ask about it. Before answering any of their questions when you call, ask them this first: “What do you charge?”. If the representative doesn’t give a direct answer, be very wary.
RELATED: What Will the Interest Rate On My Lawsuit Loan Be? (Calculator)
2: Applying with brokers is expensive, slow, and more likely to aggravate your attorney.
**TIP: Avoid working with brokers and only deal with direct loan companies. Lawsuit loan brokers can add an unnecessary 15-20% in cost to your transaction. Even worse, they will send your case information to dozens of different funding companies, all of which will call your attorney’s office at the same time. Needless to say, your attorney will not be happy.
3: Your law firm will respond to a funding company sooner if you mention their name in advance.
**TIP: Give your lawyer a heads-up before applying. Before applying for pending lawsuit loans, notify your attorney first. This will help your law firm be prepared for any document requests by the funding company. Remember: the whole process occurs between the funding company and your attorney’s office. Keeping the two parties in sync can do wonders for expediency.
4: Finding the right company for your case is tough.
**TIP: Ask your lawyer if he or she regularly works with/ or is aware of a professional pending lawsuit loans company. Why risk trying a new company if your lawyer already has a working relationship with one? Nonetheless, you must stay vigilant—just because your law firm works with a funding company doesn’t mean it’s the right one for you.
RELATED: The 25 Best Pre-Settlement Funding Companies in 2023
5: The more questions you can answer about your case, the fewer questions the funding company will have for your attorney.
**TIP: Know your case like the back of your hand before applying. To get the process moving along faster, review all the general facts of your case before calling to apply. Every question you answer is one less question your attorney will have to spend time answering.
6: Funding companies move as fast as your attorney sends them your case documents. This often takes time as law firms tend to move slowly.
**TIP: For faster service, come prepared with case documents.If you want to get the ball rolling sooner, collect the following information from your attorney prior to applying: filed complaint, key medical reports, demand letter and police report (if you have a personal injury case). These are the general documents a funding company would request from your law firm. Having these documents available ahead of time will help you skip this step.
RELATED: Can My Lawyer Deny Me From Getting a Pre-Settlement Loan?
7: The loan amount you qualify for is equal to 10-20% of your case’s entire monetary value.
**TIP: Ask your attorney for the estimated value of your case before applying. This will help you expect a realistic amount when you apply for loans against settlements or lawsuits. Approximately knowing the amount you can qualify for will help you better manage your expenses down the line.
8: Pending settlement loans can be expensive.
**TIP: After finding a direct funding company with low rates, only take what you truly need to survive. While the money is yours to spend as you wish, it is recommended you only use the cash for living expenses and other necessities.
3 Questions to Ask Before Applying for a Lawsuit Cash Advance
1. Will I be required to repay the cash advance if I lose my case?
If the answer you receive is anything but a clear and resounding ‘no’, it’s suggested that you move on. Under no circumstance should you have to repay the advance if you lose your case. A credible funder will only expect repayment if you win your case. Legal funding is supposed to be non-recourse, which, unlike a loan, carries zero risk to the plaintiff. This is because repayment is contingent upon you winning a recovery — if you lose your case it should be your right to keep the money for free.
2. What fees and rates does your company charge?
Always know what you’re paying before signing up for a lawsuit cash advance. Most funding companies assign rates based on the risk-profile of a case, while other have fixed rates for all types of cases. You need to know if your interest accrues monthly or if a fixed payback is assigned for defined ranges of time. Always ask the company’s representative if the rate is compounded monthly or if a fixed payback is expected.
As a usual guideline, anything below 5% per month is considered the industry standard. Be wary of lawsuit cash advance services that charge interest above 5%. The timing of when you’re applying for a lawsuit cash advance must also be taken into account. The earlier you apply during litigation, the larger the payoff will be once your case is settled one or two years down the line. A safe way to protect yourself is to find a lawsuit cash advance company with rates below 4% per month.
3. Does your company require early paybacks or monthly payments?
If the answer to either of these questions is ‘yes’, do not work with this company. As mentioned before, the nonrecourse nature of this transaction doesn’t require the usual terms that come with a regular loan. Therefore, you should never have monthly payments due, nor should you be pressured for early paybacks. As a general rule, legal funding companies will charge you nothing until—and if—your case is settled. That means no application fee, no hidden fees, and no monthly payments.
Is Getting a Cash Advance on Your Lawsuit the Right Move for You?
Loans against lawsuits are for plaintiffs who are injured and can’t wait for their cases to settle.
If you are on stable financial footing, it is not recommended that you borrow money against your lawsuit. You should only consider getting loans against lawsuits if you truly cannot wait for your case to settle. Otherwise, waiting patiently for your case to settle is your best course of action.
If you’re in an ongoing lawsuit and the bills are piling up, call Nova Legal Funding at 800-760-0704—or apply online by filling out the contact form linked to at the top right-hand side of your screen.
Are Lawsuit Cash Advances Available in My State?
We provide cash advances against pending lawsuit settlements in 39 states. The states where we are unable to provide settlement advances are Arizona, Arkansas, Colorado, Illinois, Indiana, Maryland, Minnesota, Nevada, South Carolina, Tennessee, or West Virginia. Here are the most popular states for settlement loans:
Ready to apply for a pending settlement loan? Nova Legal Funding is here to help.
This post was written by Ron Sinai of Nova Legal Funding, a California lawsuit settlement loans company that serves plaintiffs nationwide. Unlike other companies, we are open and transparent about our funding process. As a result, we’ve been able to help countless plaintiffs get loans against pending lawsuits. We provided funding to all types of cases, including but not limited to:
- General personal injury accidents
- Car accidents
- Defective products
- Medical malpractice
- Premise liability
And much more (for a complete list of the cases we fund, click here)
“Nova Legal Funding went above and beyond to help me.”
“I have a lawsuit against Wal-Mart and unfortunately my case won’t be settled until some time next year. In the meantime I am unable to work due to the extent of my injuries. With no money coming in, I decided to apply for a pending lawsuit loan. Ron with Nova Legal Funding went above and beyond to help me. Even though I was denied twice, Ron didn’t give up. I can’t thank Ron enough for all of the time he spent to get an approval.”– Lisa B. via Facebook