If you’re just beginning your research for funding sources during this challenging time of your personal injury lawsuit, keep reading. Pre-settlement funding is a good solution for those who need cash immediately to pay their medical and other bills. It’s awarded as a lump sum advance or in monthly installments over a period of time, and best of all, pre-settlement funds do not need to be paid back like a loan—even if your case loses.
Of course, there are other sources out there that you might or might not have considered. Here are the most common:
A traditional bank loan is the type of funding most people seek first when they find themselves in financial trouble. Acquiring a loan from a lending institution requires the completion of an application and a sometimes lengthy approval process. Getting a loan from a bank can be tedious and generally requires that you, as the applicant, provide any information asked of you just to get the process moving. And even after all that effort, you might not get approved for a loan.
A source of private funding, hard money is an asset-based loan where the borrower receives funds from a private investor or company that are secured by property or assets. The downside of these types of loans are that the interest rates are typically higher than with conventional commercial loans. This is because of the higher risk involved and much shorter term (as short as three months to as long as 24 months). Hard money lenders usually want a borrower to pay points up front. There also can be fees involved that you will not recover.
Credit card funds
In desperation, many people get cash advances from their credit card companies when they need funds. This can be costly, so it’s important to read the fine print and get an understanding of the consequences associated with late payments or defaults. Interest rates on credit card advances are some of the highest in the financial world. Rates are higher than a card’s standard rate, plus there is generally an advance fee to pay on top of any interest rate charged. If you don’t want to pay monthly usage fees, you should make sure to pay off your advance within a month of receiving it.
“Family and friends” funds
Depending on your personal situation, an option is funding from a family member or friend. Obviously, this type of lending has downsides and the potential to cause problems in your personal relationship, but it is an option nonetheless if you need help alleviating your financial crisis. If you lose your personal injury case, however, you might be left unable to pay back the person who lent you money, which could hurt your relationship and cause all kinds of unwanted family stress.
Pre-settlement funding is the best source of money if you’re in the middle of a lawsuit and need funds to pay your rent, mortgage, or other bills. At Resolution Funding, you can rest assured that we offer the lowest rates in our industry. We charge a one-time document review fee of $250, which you only pay after your case settles, and a flat interest rate that only begins to accrue once you receive funds. And again, you do not need to repay your advance if your case loses.