Your legal counsel has suggested that you consider securing a settlement loan to help with expenses as your suit moves forward. As you begin to look into this possible funding solution, you will discover several ways that this type of loan is different from other lending arrangements. Here are four examples of things that may surprise you about settlement loans and how they work.
Approval is Based on the Merits of Your Case
Many of the factors associated with securing a car loan, mortgage, or signature loan have no bearing on the ability to obtain a settlement loan. Instead of things like your income level or current credit score influencing the decision, the primary focus of the lender is the specifics of your pending personal injury suit.
The goal is to determine if your case has a good chance of being settled out of court or resulting in a judgment in your favor. In order to adequately evaluate your case, the lender will be in touch with your legal counsel and require that certain documents be supplied. Assuming the lender determines you are a good risk based on the merits of your case, the application is likely to be approved
The Loan Has No Impact on Your Credit Rating
Perhaps you have some concerns about the loan having a negative impact on your current credit score. If the concern has to do with a hard inquiry to one or more of the major credit bureaus, rest assured that a reputable settlement company will not initiate any type of credit inquiry. That’s because your credit is not used as a basis for evaluating your application.
On the back end, approved settlement loans settlement loans do not impact your credit score because of the way they are structured. No payments are due until your case is settled, so there will be no negative comments about not paying anything in the interim. Once your case is settled or a judgment is awarded, your lawyer will forward the funds needed to pay off the loan, recover his or her fees, and remit the remainder directly to you.
You Have More Than One Disbursement Option
Many people assume the only disbursement option with a settlement loan is one lump sum. While that works fine for some individuals, others prefer to use the loan funds to create a steady stream of income. It’s possible to set up a series of disbursements over a period of months or even a couple of years.
You may prefer a series of payments for budgeting purposes. This is often a good choice when your main concern is replacing the income you lose by not being able to work. When you need a lump sum to cover expenses that have already been incurred, that can be arranged as well.
No Payment Due If You Lose the Case
Are you wondering how to repay the settlement loan if you lose your case? The best companies will not require any payment unless you win the case or obtain a settlement before it goes before a court. That’s one of the reasons why the team evaluating your application look so closely at the details and prospects of your personal injury suit. They want to determine if you are likely to receive some sort of compensation. If things don’t go the way you, your legal counsel, and the lender expect, you do not have to repay any of the loan money that is already disbursed.
Don’t let financial woes make your recovery period more difficult. Contact a reputable specialized financial services company today and begin the application process. The money you need could be in your bank account in as little as one business day.
