We understand that pursuing a personal injury lawsuit often comes with financial pressures. Generally, people with a pending lawsuit think of a pre-settlement loan as a means to cover litigation expenses and other bills while they wait for the settlement to happen. But pre-settlement loans are not that easy to get and come with their own pros and cons. Here, you can understand why it is not that easy to get a lawsuit loan and why the cost is so high.
Why are pre-settlement loans expensive?
Non-recourse feature: Since pre-settlement loans are non-recourse settlement advances, the lending party has to bear all the risk if you don’t win your case. This makes these loans more expensive than traditional loans due to the uncertain outcome of lawsuits.
- Depreciating lawsuit value: The longer it takes for your lawsuit to settle, the more its value decreases. With no collateral required for a pre-settlement loan, high-interest rates are charged to compensate for the diminishing value of the litigation.
- Brokerage fees: Lenders often pay brokers a commission for leads and assistance in expediting the cash advance process. Additional transaction fees may apply, further increasing the cost of pre-settlement loans.
- Underwriting and application fees: Generally, application fees range between 5% – 25% of the loan proceeds and cover the cost of processing your application and ensuring compliance with regulations. This can be expensive due to the extensive background checks required.
- Compound interest: Pre-settlement loans accrue compound interest, making it harder for borrowers to pay off their debt and potentially leading to a continuous accumulation of unpaid fees.
Considering low-cost pre-settlement loans?
Our company understands that the cost related to litigation can take a toll on your savings. But now with low-cost pre-settlement loans, you can cover the urgent need for money to pay for the expenses of medical treatments, mortgage payments, or other necessities. This is because you don’t have to make any payments until you win your case.
At ECO Pre-Settlement, we offer low-interest rates for those with strong personal injury lawsuits, helping alleviate the financial burdens you may face during this challenging time. Remember, it’s essential to carefully consider your options before committing to a pre-settlement loan. Reach out to us to discuss your case and find out if our pre-settlement services are the right fit for your needs.