When you reach a settlement for your personal injury case, you may think that the case is over. However, getting your settlement checks can take months or even years depending on your agreement with the defendant. While waiting for your settlement, expenses can build up, leaving you in a financially compromised position.
If you reached a settlement in your case but are still waiting on compensation, a post-settlement loan might be the answer for you.
How Long Does It Take to Get Your Money Post-Settlement?
Once the plaintiff and defendant sign a settlement agreement, the defendant pays an initial sum of money to the plaintiff. However, it is not usually the full amount because there is no law requiring that a settlement be paid in a certain amount of time.
As a result, the amount of time it takes to receive settlement payments varies. Contractual terms set by the settlement agreement can spread the payments between months or even years.
For many people, a post-settlement loan can help with basic expenses until they start receiving settlement checks. If a funder approves your post-settlement loan, you could receive funds in as little as 24 hours.
How Do I Know if a Post-Settlement Loan is Right for Me?
Post-settlement loans can be incredibly useful in many cases. For example, if you accept a settlement, it may take months or even years before you start receiving settlement checks. While waiting for your settlement payments, expenses like medical bills, mortgages, rent, or other living expenses can pile up quickly.
If you have reached a settlement and have settlement payments on the way, post-settlement funding is the solution for you.
Does My Case Type Qualify for a Post-Settlement Loan?
In order to receive post-settlement funding, there are a few requirements you must meet. First, an attorney must be representing your case. Second, you must have a settlement offer or be receiving settlement checks. Typically, the following types of cases are eligible for post-settlement funding:
- Auto accidents,
- Personal injury,
- Product liability,
- Defective medical devices,
- Defective drugs,
- Employment-related litigation,
- Concussions, and
- Labor accidents.
Having a settlement offer gives funders documentation of your possible settlement amount. This increases your chances of receiving post-settlement funding because it shows funders the value of your case.
However, keep in mind that personal injury cases do not qualify for post-settlement loans in some states.
How Much is the Interest on Post-Settlement Loans?
The amount of interest on a post-settlement loan is usually high due to the risk associated with cash advances. Typically, funders experience losses when they fail to recover the funds or have a lower recovery than expected. That loss is usually anywhere between 8-10% of the original advance.
Funders also pay additional costs to access capital through 3rd party institutions or capital markets. Since advances aren’t secure, funders can expect to pay 12-15% of the advance just for obtaining it.
For example, if a funder gives a client a $5,000 advance, they would experience $472 of losses and $300 of cost. With an interest rate of 3% per month, the funder would receive $5,900 from the client as repayment. Thus, if you subtract the total cost of the loan for the funder ($5,772) from the total repayment received from the client ($5,900), you get the net revenue for the funder, which is only $128.
Based on this example, many post-settlement loans will have an interest rate of 3% per month or 36% per year. However, some can be as low as 27% or as high as 60% per year.
At Nova Legal Funding, our post-settlement loans have some of the lowest rates in the industry. Our interest rates range from 1-3%.
What Information Do I Need to Provide to Get Post-Settlement Funding?
When applying for a post-settlement loan, you will likely need the following:
- A letter from your attorney stating your settlement amount;
- The amount of funding you need;
- A copy of your attorney’s letter to the insurance company and/or defendant’s attorney outlining their obligation; and
- A copy of the executed general release.
Most companies discuss these details with your attorney. Make sure you provide the contact information for your attorney to the lawsuit loan company so they can discuss your claim.
Get Low-Rate Post-Settlement Funding Today
At Nova Legal Funding, we understand how difficult it is to manage your finances and a lawsuit at the same time. We offer risk-free borrowing with some of the lowest rates in the industry. Upon approval, you can receive your post-settlement funds within 24 hours.
If you need a post-settlement loan, give us a call at 800-760-0704 to speak with a funding specialist or contact us online for a free consultation.