As a plaintiff, you may understand legal funding. But we are explaining it to make things clear for a general audience. Legal Funding is a cash advance offered to the litigant by a lawsuit funding company to pay the legal bills during ongoing litigation. There are a few drawbacks of legal funding in comparison to its benefits. We think that as a trusted Litigation Financing company, it’s our duty to highlight all the sides of any loans and investments. Sometimes, legal funding doesn’t turn out as helpful for every individual.
But legal funding from reputed providers like America Lawsuit Loans will undoubtedly ensure that you get the urgent cash you need during the pending settlement.
Pros of legal funding for personal injury litigations.
Non-Recourse loans
All legal funding is a non-recourse loan, which means that repayment is based on the result of the lawsuit. If a plaintiff wins the case, then only the repayment is required. Either way, if the applicant loses the case in court, the Lawsuit funding firm will never ask for the payback. This means that you are not obligated to repay the money if you lose the case and the compensation opportunity. This is the biggest reason that tempts plaintiffs to get legal funding from America Lawsuit Loans as they are the most reputable company of lawsuit loan providers at a low rate in comparison to the complete industry of litigation financing in the US.
No credit checks needed
Another advantage of legal funding is that while offering a legal loan to the plaintiff, the lending firms never ask for a credit check. This means that none of your past finances will affect your future funding. Even if you get a bad credit score, you can still hope for lawsuit loans against the future compensation amount.
Quick Way of Getting Cash for a Lawsuit
Another pro of legal funding is that it is quick. Therefore, you can have your money in very little time compared to bank loans or personal loans. In case you need urgent cash to pay the legal bill or any medical bill related to the injury caused. You can apply for legal funding.
Comes in handy during the absence of funds.
In several instances, the plaintiff agrees to settle on a lesser compensation amount because of the absence of funds. But with legal funding on your side, you can fight till the last. To acquire the appropriate amount of compensation from the offender.
Cons of Legal Funding that plaintiffs must know.
They are expensive loans.
As we mentioned earlier, legal funding is non-recourse loans. This means that the plaintiff has no obligation to return the money if he/she loses the case. This is the very reason for the high interest rate loans. Lending companies charge high interest rates on the loan, which they offer against the future settlement. Since there is no collateral guarantee against the loan, the lending firm is nervous. Eventually, all of this leads to expensive funds.
May take all your Settlement
Another disadvantage of acquiring legal funding is the long duration of the litigation. Any personal injury claim takes time to settle. It can vary from months to years. This leads to a rise in the amount due to added interest on the cash advances taken. Eventually, when litigation takes a long period to settle, the total amount you owe to a lending firm increases to the point that you have to give all your compensation money to the funding firm.
At the Bottom
It is a bit of a relief that not every litigation takes a long time to settle. In fact, legal funding can be handy overall. But only if the settlement loans are from reliable companies like America Lawsuit Loans. As a plaintiff, if you need urgent cash, you can apply for legal funding with us by calling +1 888-335-3537 and filing our Online Application of Lawsuit Loans.
