What Is a Settlement Loan?
Before anything else, it is much better for us to discuss first what settlement loans are. A settlement loan is definitely not a loan. However, it is only referred to as a settlement loan simply because it resembles some characteristic of a loan.
A settlement loan is more like a cash advance. The plaintiff will be granted the reasonable amount of cash that he needs while waiting for the final verdict of his lawsuit. Upon receiving the cash, the plaintiff won’t be required to pay anything. It means that there is no upfront cost. There won’t be required monthly payments as well.
When Will the Plaintiff Be Required to Pay?
If there won’t be any monthly payment required, then how and when will the plaintiff be able to repay the lawsuit loan company? Well, the plaintiff will have to wait until the case is closed before he determines whether he should pay the lawsuit loan company and how much should he pay for the settlement loans he received from the company before.
If the plaintiff wins the case, then he is now obliged to pay the lawsuit loan company after he receives his settlement cash. The amount that he will pay to the lawsuit company will be dependent on the interest rate and the amount he received as settlement cash. If the total amount of cash that he owes from the company is much higher than how much he received as a settlement, then he is only required to pay the company a portion of what he received, whether it is lower than the computed amount due.
So, what if the plaintiff loses the case? Then, there is nothing to pay at all. If the plaintiff loses in court, then he owes nothing from the lawsuit loan company. Isn’t the terms for settlement loans are very enticing? This is why it is not fair to think that getting a lawsuit loan is bad at all. After all, it is the lawsuit loan company that bears the risks.
What Is the Purpose of Getting a Settlement Loan?
Victims who have Fela case, labor law case, verdict cases, commercial lawsuit cases, racial discrimination case, 3rd party case and other legal cases are entitled to apply for a settlement loan. However, for what purpose should they get a lawsuit loan? Settlement loans can be used for either funding the lawsuit or using it for your own needs, such as for your medicine, your daily foods, and other needs. You have the right to use the cash advance you get from the settlement loan for your own good.