If you are in a personal injury lawsuit and need money, you have an option other than a bank loan; you can apply for a lawsuit loan. A bank loan and a lawsuit loan are actually quite different from each other. This blog post will discuss some of the differences.
You are probably familiar with a bank loan. You apply. The bank checks your credit score. If you don't have a good credit rating, you may find that you are denied bank loans or you have to pay very high interest rates. Just taking out a bank loan could hurt your credit rating. If you get the loan, you will likely be expected to pay interest regularly. Failure to repay the principal plus interest could ruin your credit rating, making it harder to apply for a mortgage, car loan or line of credit.
A lawsuit loan works differently. You apply. The lawsuit loan company asks for information about your case. A lawsuit loan company will not inquire about your credit rating, current debt load or other financial information such as your employment or income that are not related to your case. Think about this. If you have been injured, your income earning capacity has probably been diminished and your expenses might be stretched to the limit. A lawsuit loan company does not penalize you if you don't have a job or if you don't have good credit. This is one reason why a lawsuit loan is an attractive option for many injured plaintiffs.
Your lawsuit loan is determined based on the strength of your case. If you have a good case and are expecting a huge settlement you are likely to qualify for a lawsuit loan. However, while loans can be in the hundreds of thousands of dollars, many loans are for a few hundred or a few thousand dollars depending on the nature of the case and the amount requested. In most cases, the loan process is fast and easy. A lawsuit loan company can usually process your application so fast that you receive the cheque in the mail within days.
So what can you do with you money? There are no restrictions. You can spend it on rent, medical bills or legal fees. You don't need to make monthly payments. If you lose your case, you don't even need to repay. In this situation, your credit rating will not be affected.
The way a lawsuit loan works is money will be repaid out of any settlement. Since a lawsuit loan company will ask your lawyer to sign a contract, the lawsuit loan company doesn't have to worry if you will meet the terms of your contract. This takes a lot of pressure off you so you can focus on winning your lawsuit and recovering from your injury. A lawsuit loan means no creditors harassing you, no monthly fees, and no damage to your credit rating.