Pre settlement funding, also called post settlement financing, is a kind of refinancing in which a pre settlement loan is taken to pay for the settlement payments. This may be in the form of a personal loan, business loan, credit facility or a home equity loan. A pre settlement funding company provides money in advance to settle the case, so that the owner gets his or her legal rights fulfilled. In cases where it cannot be settled, the cash can go to another party who promises to pay it.
Once the expected settlement amount has been settled, the pre settlement funding company disburses the loan to the lawyer or law firm. The loan is based on the rate at which the pre settlement lawsuit loan is being repaid. The loan is advanced to the lawyer or law firm and is paid off once the expected settlement amount has been settled. If the case does not settle, the loan is rolled over and another loan taken out.
Pre settlement loans are a source of short term financing for those who cannot get traditional financing for a number of reasons. It may be difficult for some people to get a loan at competitive interest rates due to bad credit, unemployment, business failure, bankruptcy or other unfavorable circumstances. In such cases, pre-settlement loans provide a feasible alternative. Many lenders offer lawsuit loans even to those with a history of filing lawsuits.
The main benefit of pre-settlement advance is the ease of applying. The funding can be approved and the loan amount advanced in a matter of hours. The loan amount depends on factors like current net income, anticipated net income after the settlement, and the amount of time to repay the settlement amount. Some pre-settlement funding companies like USCLAIMS allow borrowers to select a payment option after the settlement amount has been reached. Borrowers can get a lump sum settlement or monthly installment.
It is important to note that pre settlement funding is different from lawsuit loans in many ways. Unlike lawsuit loans, plaintiffs do not have to repay the funding advanced if they lose their case. Also, unlike lawsuit loans, plaintiffs need not have good credit to secure funding. Most of the funding companies require proof of identity, legal representation, and a working relationship with the lending entity. In some states, lenders may also require the plaintiffs to have a cash reserve to ensure that the funds advanced are repaid if the case is lost.
Be careful when you are applying for pre-settlement funding. Make sure to evaluate the terms and conditions carefully. Find out if the company has a system for monitoring and collecting payment from borrowers. You should also find out how the company will return the advance payments if the case is lost. Get as much information about the loan as possible. If you are unable to obtain financing through a traditional lender, your best bet may be an online advance loan company. Kindly visit this website: https://en.wikipedia.org/wiki/Legal_financing for more useful reference.