Facts about Settlement Loans

2007-03-08 10:33:40

( Financial )



Not everybody is capable of funding claims and lawsuits. We all know that big sums of money are needed to finance lawsuits and claims. Loan providers have come up with a type of financing called settlement loans that provide lawsuit advances to help cash-stripped plaintiffs to fund their claims.

Understanding Settlement Loans

A good credit standing and a verifiable source of income are main considerations that loan providers look at before approving a loan or a mortgage. In settlement loans, or what is also known as lawsuit advances, however, the source of income and the credit standing of a claimant are not relevant. The only thing that the loan giver will consider in lawsuit cash advances is the expected settlement value that the plaintiff or claimant might get. In fact, a settlement loan is considered more of a cash advance than a loan. This type of financing is also only payable if and when the claimant settles. Thus, a settlement loan is not subject to existing usury laws.

Benefits of Settlement Loans

Settlement loans are crucial in providing people the necessary cash to fund legal fees, medical bills, professional maintenance costs and living expenses. Some claimants don’t have money to pay for their medications or are not able to sustain their everyday needs because of the injuries they get. Sometimes they just opt for quick settlement even if it the amount is insufficient or lower than expected. Thus, settlement loans provide plaintiffs cash to help them carry on with their lives while their suits are still in progress.

Since loan providers do not require credit and income verifications, the process of securing settlement loans are usually fast. Moreover, the only time that the loan recipients would be required to pay for such financing is when they reach settlement of their claims. Thus, loan recipients need not worry about monthly repayments or amortizations for this type of financing.


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