What are the fees and interest rates associated with pre-settlement funding?
Pre-settlement funding, also known as lawsuit funding or a lawsuit cash advance, is a service provided by companies that give plaintiffs a sum of money to cover expenses related to their civil lawsuit. The funds are intended to help a plaintiff, who may be struggling financially and may not be able to find other resources, cover their bills and life expenses while their case is pending settlement or proceeds to trial. Pre-settlement funding is a form of non-recourse funding, meaning the plaintiff is only obligated to pay the funds back if they win the case or settle.
When considering pre-settlement funding, it is important to consider all of the associated fees and interest rates, as they can have a large impact on the total cost of the advance. Companies that provide pre-settlement funding typically charge fees and interest payments based on the amount of money advanced and the duration of the loan, as well as any additional fees and charges associated with the process.
The fees typically associated with pre-settlement funding are an upfront fee, processing fee and/or origination fee. An upfront fee is a one-time expense paid at the time the loan is taken out, often based on the amount of money advanced and the duration of the loan. A processing fee is a one-time fee paid in addition to the upfront fee, which covers costs associated with processing and administering the loan. An origination fee is a fee charged for originating the loan, often a percentage of the total amount of money advanced.
The interest rates associated with pre-settlement funding vary depending on the company and the type of loan. The rate is typically based on a variety of factors including the type of case, the amount of money advanced, the duration of the loan and the amount of time it will take to complete the case. Generally, the higher the amount of money advanced and the longer the duration of the loan, the higher the interest rate will be.
In addition to the fees and interest rates associated with pre-settlement funding, there may be additional charges that are required in order to complete the application and funding process. These charges can include legal fees, filing fees, administrative fees, service fees and Credibility Fees. These fees also vary depending on the company and the type of case and can range from several hundred to several thousand dollars.
Pre-settlement funding can be a helpful option for those who are financially strapped and need additional funds while waiting for their case to settle or reach a verdict. However, it is important to carefully consider all the fees and interest rates associated with the loan in order to determine if it is the best option for you. Additionally, it is important to carefully review the terms and conditions of any agreements to ensure that the terms are reasonable and that you fully understand your payments and obligations.
