If a person anticipates winning or settling a lawsuit, he can apply for a lawsuit or settlement loan with a lawsuit loan lender, Nolo says. Generally lenders only lend if the chances are high that the plaintiff can win his case.Continue Reading
Plaintiffs should get several recommendations with litigation funding companies and compare interest rates, Nolo advises. Rates are generally high in these types of loans, and lending companies may be reluctant to quote a rate until it's had the chance to evaluate the case.
Plaintiffs should also ask about application fees, as some lending companies charge just to evaluate the case. It's also helpful to inquire about how often the interest is compounded. Some companies compound monthly, while others compound interest more often. Compounding means the customer is paying interest on interest, so the more the interest is compounded, the more money to be paid back at the end of the case, Nolo notes.
Plaintiffs may also want to confirm that they are not required to pay the lender more than the settlement or award amount. Plaintiffs may also want to ensure they pay nothing if they lose their cases. Lawsuit lending is not regulated by state and federal governments in the way that regular banking loans are, Nolo says.Learn more about Law