Advantages and Disadvantages of Car Accident Lawsuit Loans
Lawsuits, even the simplest ones, can be pretty grueling. It can take out much of your resources, money, and time. These are just some of the reasons why plaintiffs would consider taking a lawsuit loan, to help them financially while in the midst of a legal dispute or waiting judgment and settlement.
For example, given the high figures of car accidents in the United States, there is also a corresponding high number of car accident lawsuits being filed. Like in most cases, settling this would take a long time. This is the reason why car accident lawsuit loans have been put in place by funding companies. Being one of the most widely used types of settlement loans, weighing in whether it would be wise to apply for this is very significant.
Before jumping into the pros and cons of such a settlement loan, it would be wise for you as a plaintiff to know what you are getting yourself into. Car accident settlement loan uses the same mechanics as that of any other settlement loan. The funding company provides you the financial help you need. In exchange, they get a portion of the settlement or award you get from winning the case.
Pros of Lawsuit Loans for Car Accident Settlement
1. Financial help in time of need.
As everyone knows, legal disputes can take a very long time before they get settled, even the simplest ones. This can drain not just your time and energy but also your financial resources. On top of this, since you as the plaintiff were involved in an accident, there is a high chance that you got injured and worse, is in no capacity to get back to work. This is why a settlement loan from a funding company can help tide you over from this time of need. The great thing is, if your application gets approved, you can spend the money anywhere you like. It will be up to you where you are going to spend the fund, regardless if it will be for your medical bills, to finance the case, or for your personal needs.
2. Can be crucial to win the case.
Litigation and legal disputes can incur a lot of fees. Additionally, you need to pay your attorney or legal counsel. This is where car accident lawsuit loan plays a very important role because in various ways, it can buy you time to negotiate the fairest settlement or award possible. If needed, this loan can even finance your expenses when you take the defendant on trial.
Cons of Car Accident Lawsuit Loans
If there are enticing advantages of this kind of loan, some of its properties may or may not make you raise your eyebrows.
1. High interest rate
This settlement loan, from many aspects, is actually great. However, what may potentially dissuade you from taking it is the interest rate. Depending on the amount and circumstances of agreement, you may pay as much as double or triple the amount of loan you took. The principal amount you borrowed including its interest may be paid annually or will depend on your agreement with the funding company.
If you are worrying that the interest will totally drain the award or settlement that you will get from winning the case, rest assured that this will not happen. You will not be given a loan and interest that will exceed the anticipated amount of settlement from the car accident lawsuit.
But think about, in time of need, receiving something is better than getting no aid at all.
2. Fast but very high standard in application approval.
Although an application for this loan can be processed within 24 hours, assessment is pretty tough. This will not be mainly through paperworks but more so on how the funding company sees the probability of your victory on the case. But this is only logical given the nature of this type of loan is. Whenever a funding company provides you with a loan, they are risking their own funds because presuming that you lose the case, you are not obliged to pay them back. This is the reason why some funding companies tend to be very picky in granting approval to applications.
For every type of loan there is, there will always be the pros and cons. So before applying for one, make sure to weigh-in all the aspects involved.