We all know what a business or personal loan is, but not many are aware of what a personal injury loan is. You may be entitled to compensation if injured due to the negligence, recklessness, or carelessness of another party. Personal injury settlements often involve high payouts, but reaching a settlement can take some time. Meanwhile, rent is due, medical bills must be paid, and you may be unable to work. Fortunately, personal injury loans can relieve the significant financial burden you may be experiencing.
Also known as pre-settlement loans or lawsuit loans, these are secured by your future settlement. They can cover living expenses and bills. The process requires the cooperation of your attorney, as the lender must know the fine details of your case. Some lawyers may see this as breaking the attorney-client privilege; however, it is unethical for an attorney to lend you money themselves against settlement proceeds.
How Do Personal Injury Loans Work?
A pre-settlement loan is non-recourse, meaning you’re not obligated to repay it if you don’t win the case. A traditional loan, on the other hand, requires repayment no matter the outcome of a lawsuit or how your financial situation changes. Once you apply (which usually doesn’t require a credit check), the lending party reviews the case with your attorney. A loan isn’t the best option for every type of case.
If approved, you will receive a cash advance equal to a percentage of your case value. The amount is determined by assessing the damages and injuries in your case and the type and amount of treatment you get. Failing to have your injuries properly treated can lower your settlement and the loan amount.
The lender will also review liability. A complex series of events and circumstances can affect liability, while the type of accident and state in which it occurred can impact the level of fault for each party. Lastly, the loan issuer will look at your insurance coverage. In some states, settlement amounts are limited based on the at-fault party’s insurance policy, but in others, additional damages can be pursued. If your state’s laws limit maximum potential settlement amounts, your personal injury loan may be lower.
What Does a Personal Injury Loan Pay For?
Pre-settlement loans fill an important financial gap. They can be used to pay for your medical care, including doctor’s visits, physical therapy, medication, and surgery. Lost wages, rent or mortgage payments, and everyday living expenses, such as food, can be covered. You can accept as much as you want from the lender’s offer to make the loan most affordable.
Personal injury loans are not regulated in most states, and thus the interest rates are often quite high. Loan amounts don’t usually cover most of what your case is worth. The lender may offer 20% of the total, or even less. Accepting a smaller loan can reduce the expense when you consider interest and fees. There are lots of factors to consider, including attorney’s fees and costs, when weighing the benefits, although a lawsuit loan can help you through difficult financial circumstances if you shop around and find reasonable interest rates.
Contact The Law Offices of Jacob Emrani
We do not charge any fees until we win your case. For more than 25 years, our Los Angeles and Orange County personal injury attorney has been representing clients and fighting for the compensation they deserve. Starting with a free case evaluation, we’re committed to being accessible and making our experience and resources fully available. To schedule your no-cost consultation, call The Law Offices of Jacob Emrani at 888-952-2952 today.