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What Are Lawsuit Loans?

Lawsuits by themselves can be a confusing and intimidating process for most people, which explains why many people do not know how lawsuit loans work, especially if they were recently introduced to this concept. You may be wondering to yourself, what is a lawsuit loan? In what situations will I require a lawsuit loan? How can I receive a lawsuit loan? When I am approved for the litigation funding, when do I need to pay the money back? These are all very good and understandable questions for you to have. Fortunately, we will go over all of these questions and concepts in the following article.

 

 

What exactly is a lawsuit loan?
A lawsuit loan is not a conventional "loan" at all, rather it is a cash advance an individual can receive based upon the merits of a lawsuit that provides a plaintiff with sufficient funding to reach the conclusion of the case when the plaintiff will receive their fair share of the settlement or verdict. Litigation finance companies invest in the lawsuit itself as opposed to advancing money to the plaintiff in the form of a loan. Lawsuit loans are not entirely based upon a plaintiff's prior credit or bankruptcy records. Other terms that are used to describe this type of funding include: litigation funding, litigation finance, litigation loan, lawsuit funding, lawsuit finance, lawsuit cash advance, case loan, case cash advance, plaintiff cash advance, litigant funding, pre-settlement loan, pre-settlement lending, pre-settlement cash advance, etc.

 

Do I require a lawsuit loan?
A loan on a lawsuit should not be considered a substitute for your settlement but rather a form of assistance that will help you stay afloat while your attorney is fighting for you. Too many plaintiffs apply for litigation financing with the belief that a lawsuit loan is simply a different way for them to receive their settlement money. Assuming you win your case, the amount of money owed to the lending company will vary greatly depending upon the length of time between the date of the advance and the date when you have received the settlement money. You should exhaust all other means of funding first. A good guideline for you to use is that lawsuit financing companies generally advance up to ten percent of the estimated settlement amount. There are some good internet sites that can provide you with more background information on lawsuit loans.

 

How can I receive a lawsuit loan?
Lawsuit lending companies are located all over the country. Some offer "low-interest rates" or claim to be the most lenient when it comes to approving lawsuit loans applications. However, there are a few lending companies that will do anything to charge plaintiffs random penalties or other charges to earn more money. These penalties will help to offset their "low-interest rates" offered and many times end-up costing the plaintiff more of their settlement. Therefore, it is very important that you complete your own research online, and contact several lawsuit lending companies to have a better understanding of what different companies can offer you.

 

In conclusion, lawsuits loans are not very complicated all. As a plaintiff, you should understand lawsuit loans and the process of securing litigation funding before you apply. After reading this article you are likely to have a better understanding of what lawsuit loans are when you require such a loan, and how can you receive such a loan.


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