As an attorney, telling your client that it could be months, if not a year or longer, before they receive compensation for their losses is difficult and heartbreaking.
When so much is on the line, such as their mortgage or rent payments or their inability to pursue medical care that could help them, it may be time to offer a frank discussion on pre-settlement loans. To help you, we created a lawyer’s guide to explaining pre-settlement loan terms to clients for our various lawsuit loans.
How Pre-Settlement Funding Works
Pre-settlement funding allows plaintiffs in a personal injury case to obtain money now through a loan based on the estimated value of their settlement. It is a way for victims to get access to their money sooner. In every situation, if the victim does not need or benefit from early access to these funds, they should wait for the settlement to come in as expected and not pay any additional fees.
Many times, clients need to meet financial obligations now, not months from now. With pre-settlement funding, they can get money in their account in as little as 24 hours to use for any needs they have. It is critical to know that:
- There are no credit checks associated with these pre-settlement funds.
- They do not have to have a job or any income to qualify.
- The money does not get repaid until they win their case.
- If they lose their case, they do not pay back the funds.
- Victims can use the funds for anything they need with confidence and no oversight.
How Pre-Settlement Funding Value Is Determined
The amount the victim can borrow through pre-settlement funds is dependent on the strength of their case as well as the estimated value of their settlement. No income or credit qualifications apply to this process. Typically, individuals may be able to receive between $1,000 and $100,000 or 10% to 20% of their settlement amount.
How Pre-Settlement Funding Is Paid Back
Once a person wins their case and settlement processes, the money from the defendant or insurance company pays for any liabilities the victims have, including their pre-settlement loan. That means they pay the full amount off at one time when they receive their settlement. There are no monthly payments and no ongoing budgetary factor to consider.
What to Expect If the Case Is a Loss
In situations where the victim loses their case, the pre-settlement lending company cannot receive the funds paid to the victim because these are non-recourse loans. There is no collateral and no outside factors that impact their issuance. If the victim does not win their case, they do not pay anything back to the pre-settlement lender.
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How the Pre-Settlement Funding Application Process Works
After an accident in which a victim hires an attorney and files a claim, they can apply for pre–settlement funding. This is a free process completely online, though it is also possible to speak to a representative over the phone with any questions you have. The following process takes place in most pre-settlement lending applications:
- The victim submits information about their case to the lender. This may include information about their claim and losses as well as the contact information for their personal injury attorney.
- The lender then contacts the attorney to verify that they are in a working relationship with the borrower and that they are in good standing. The attorney verifies the strength of the case as well as the overall estimated value.
- The lender will then provide an offer to the victim for the amount they can borrow. At this point, if they do not want to do so, the victim does not have to accept the offer. There is no cost.
- If the borrower approves the loan terms and conditions, the loan can then be funded directly to them in as little as 24 hours.
There is no obligation for the borrower to actually go through with the pre-settlement fund unless they find it beneficial to do so. It does not do a credit report either, which means there is no risk to the borrower in finding out if they qualify. There is always a wide range of support available to answer questions, including our FAQs section.
Explaining the Benefits of Pre-Settlement Funding
Pre-settlement funding is a critical tool today. The National Center for Health Statistics injuries report notes that, between 2020 and 2021, 307,785 people suffered injury deaths, with 44,534 of them being motor vehicle accidents, many of them potentially being the result of negligence.
Consider the benefits that come from pre–settlement funding:
- Money in as little as 24 hours. Those funds can be a lifeline to meeting financial obligations now before a settlement comes in.
- No risk of paying for it if you do not receive payment in a settlement. This is a critical factor for many to realize. You do not have a long-term commitment to this debt.
- The costs are transparent and provided at the time of offering. There is no hidden fee schedule, and all information is clearly defined.
- The borrower can use the funds for any need they have without question.
- Pre–settlement funding does not require employment, credit, financial documents, or any other sensitive information.
- Lawyers can offer insight into how pre-settlement funding works and why it can be helpful to those considering its value. It is critical to explain that there is a cost to using these funds, but it is minimal compared to the long-term costs associated with personal loans.
With the guidance of an attorney, your client can learn more about what settlement they expect and how long the process may take to determine if using pre-settlement funding is beneficial for attorneys.
Click to contact the Silver Dollar Financial Team today or Call +1(844)871-0628
Seek Out a Free Consultation Now
For those ready to get their financial needs met, offer access through the trusted team at Silver Dollar Financial. Let us offer you a quote for the value of your claim and then provide clarity on what you can expect when receiving those funds.
Apply today after reading a lawyer’s guide to explaining pre-settlement loan terms to clients.
Call or text +1(844)871-0628 or Apply Now for Pre-Settlement Funding