28 Aug Fact vs. Fiction: 3 Pre-Settlement Funding Myths that Plaintiffs Should Know (and 1 Surprising Fact)
The term “fake news” has been thrown around a lot lately, usually in a political context, referring to deliberate disinformation through various media. But myths and misconceptions about pre-settlement funding can be just as dangerous since they are perpetually shared online. At Certified Legal Funding, we take legal settlement loans very seriously. We know that cash for lawsuits can mean financial empowerment to those who need it the most while waiting for a lawsuit settlement. So we created a list of some misleading myths and misconceptions that may confuse our clients, along with some frequently asked questions.
Is funding for lawsuits considered a loan?
By far the biggest misconception we stumble upon almost daily is that “certified funding” is just another term for bank loans. But the difference is much more than simple marketing speak. To debunk this myth, we need to take a closer look at the difference.
Unlike bank loans, legal funding for lawsuits is non-recourse. What does this imply for the plaintiff? Simply put, legal funding companies only collect a return on their investment in the event of a successful judgment or settlement. A bank loan entails repayment of the principal and interest whether you win or lose your case.
Are legal finance loans secure?
Legal finance loans have gotten a bad rap mostly because of corrupt funding brokers. There are a few things to keep in mind so you know what you are getting yourself into. First, deal directly with reputable lawsuit loan companies, such as Certified Legal Funding, because loan brokers can calculate an additional 15-20% in cost to your transaction.
Another disadvantage in dealing with brokers is poor data security because brokers are likely to share your case details with dozens of legal funding companies. Here at Certified Legal Funding, for example, we make sure all the data shared with us stay with us and we never share it with third parties.
Is a bank loan a better option compared to a settlement advance?
This is another myth that can easily be debunked. At first, bank loans may appear cheaper on paper. However, it’s worth remembering that legal funding companies are taking a huge risk by investing in your case because they get nothing if you lose in court. So, naturally, they need to get a competitive return.
Fact: You can apply for legal funding now.
In addition to being non-recourse, cash for loans is a lot more accessible. It can feel as if the legal system favors only rich people, and certified funding aims to balance it out. Unlike bank loans, getting pre-settlement funding does not require background checks.
This means that you can apply for legal funding even if your credit score is on the lower side. Not only that, but the time from application to cash-in-hand can be as little as 48 hours. Pre-settlement loans are not only a great way to ensure you can pay your bills (including your medical bills) before you win your case, but they are not as time-consuming as applying for bank loans.
Contact us for a consultation.
Some of the features of our cash advance program include lowest rates, no credit check or personal collateral, no employment verification, no out-of-pocket fees or application costs, and approvals within 24 hours. If you have any questions you would like to discuss, contact us and we will guide you through the entire process. Certified Legal Funding can help you better understand how pre-settlement funding works.