Will I need to make payments on my pre-settlement funding while my case is ongoing?
Pre-settlement funding is a type of loan designed to provide financial support during a personal injury case that may take several months or years to resolve. In such instances, it can be difficult to maintain financial stability while waiting for a settlement to be finalized, but pre-settlement funding can provide an invaluable aid to those in need.
This type of financing is designed to bridge the gap between a personal injury settlement offer and the actual receipt of the settlement. By providing funds while the case is in process, it can give an injured party the funds needed to pay medical bills, cover additional legal costs, and meet monthly expenses.
But one of the most common questions is: do you need to make payments on pre-settlement funding while the case is ongoing? The answer to this question is dependent on the specific details of your pre-settlement funding agreement. Generally, though, payments are not made on the loan until after a settlement is received.
The way pre-settlement funding works is that a funder will provide a loan to an injured party in advance of a personal injury settlement being paid. This loan is paid back when the settlement is received. In the interim, the injured party does not need to repay the loan, so there is no pressure to pay while the case is ongoing.
The pre-settlement funder also assumes some risk by providing the loan, so in some cases, the interest rate is higher than it would be on a typical loan. Those who choose to take on pre-settlement funding should understand the terms of the agreement before signing, including any applicable interest rate.
In some cases, regardless of the specifics of the loan agreement, it can be possible to make payments on pre-settlement funding while the case is ongoing. If a personal injury lawyer and their client are confident that a settlement is likely and they want to reduce the total amount owed, they may be able to negotiate terms with the funder that allow the loan to be partially paid off while the case is still in process.
Pre-settlement funding can be an invaluable asset during a long, drawn-out personal injury case. It’s important to understand the terms of the loan agreement before signing, though, and to consider if making payments while the case is ongoing can be feasible and beneficial. Knowing the details of a pre-settlement loan and having realistic expectations can help ensure that the financing process is a successful one.
