While both pre-settlement funding and traditional loans offer financial assistance, they differ in several significant ways. Pre-settlement funding is specifically designed for plaintiffs who are involved in a legal case and need financial support while they await the outcome of their case. Traditional loans, on the other hand, are available to anyone who meets the lender’s requirements and can be used for any purpose.
In this post, we will cover some benefits of pre-settlement funding when compared to traditional loans.
Pre-settlement funding vs. Traditional Loans
When you’re facing mounting bills and expenses after a personal injury, it’s understandable to consider taking out a traditional loan to help cover the costs. However, there are risks associated with taking on debt, especially if you’re already facing financial stress. Pre-settlement funding offers a way to avoid these risks and get the financial support you need. Here’s how:
No repayment if you lose your case
One of the biggest risks of taking out a traditional loan is that you’ll be on the hook for the debt even if your case doesn’t result in a favorable settlement or verdict. With pre-settlement funding, this isn’t the case. Since pre-settlement funding is typically considered a non-recourse loan, you don’t have to pay back the funding if you lose your case.
No credit check or collateral required
Traditional loans often require a credit check or some form of collateral to secure the loan. This can be difficult if you’re already facing financial challenges. Pre-settlement funding, on the other hand, doesn’t require a credit check or collateral. Instead, the funding is based on the strength of your case.
No monthly payments or upfront costs
Traditional loans often require monthly payments, which can add to your financial stress. With pre-settlement funding, there are typically no monthly payments required. Instead, the funding is repaid from your settlement or verdict amount. Additionally, most pre-settlement funding companies don’t charge upfront costs or fees.
Greater flexibility and control
Pre-settlement funding offers greater flexibility and control than traditional loans. Since you don’t have to make monthly payments or worry about repayment until your case is settled, you can focus on recovering from your injury without the added stress of debt. Additionally, you have greater control over how the funding is used, so you can use it to cover specific expenses or bills.
Overall, pre-settlement funding offers a way to avoid the risks of traditional loans and get the financial support you need during a difficult time. If you’re considering pre-settlement funding, make sure to check out the rest of our page. We at Certified Legal Funding in Tampa are happy to answer any questions or doubts you may have. Feel free to contact us and we will assist you in the best way possible regarding your case.