After a significant accident, pursuing a personal injury case can be rewarding financially but may take years to succeed. In the meantime, many victims may need cash now and feel unable to get it without a settlement.
However, personal injury settlement loans can help accident victims who need compensation after a significant accident. Understanding these loans will make it easier for you to decide if they are suitable for your needs or if you should seek out another financial option until your case is successful.
What are Personal Injury Settlement Loans?
A personal injury settlement loan is what its name implies. They are a type of loan that people going through an individual injury case can attempt to get before their case is over. Loans of this type are based on the premise that you’ll win. If you do not, many lenders do NOT get the money that they sent you back. The money they send you is usually not the total worth of your settlement but a portion of it.
Typically, all personal injury cases are eligible for these types of loans or advances. These include slip and fall damage, various types of workplace damage, assault and battery civil suits, product liability, wrongful death scenarios, and much more. And after a significant car accident in which you are heavily injured, these types of loans can help you while you wait for a settlement to finish.
You can apply for these loans as you would any other, though you’ll need to find a lender that provides this option. Many specialized companies exist to provide personal injury settlement loans and operate in similar ways. Typically, they advance you the money based on the settlement that you are likely to get. Usually, they don’t expect regular payments on the loan until your case is over.
And once you get the settlement money, you use it to pay things like lawyer fees and litigation costs before sending the rest to the lending company. Though this does mean that you’ll likely end up with a little less money, these loans are a good choice if you need cash right away and are likely to win your case.
How Do These Loans Help?
Personal injury settlement loans provide a pretty broad array of benefits that make them worth considering. Though they are by no means safe from downsides, they can give you the money that you need when other sources fail. Just a few benefits that you can anticipate from this type of loan include how it offers you:
- Easy Approval — Most settlement loans typically don’t require a credit check but focus on your likelihood of winning, meaning you can be approved more quickly.
- Fast Acceptance — Like many other types of fast-acting loans, you may be able to get your money within a few hours or even a day or two after your initial application.
- Pay Off Debts — After a severe crash, you may want to use some of your settlement cash to pay off medical debt or other costs that you incurred after the accident.
- Avoid Financial Problems — If you are out of work while you’re waiting for your lawsuit, use the money from this loan to pay your living expenses and day-to-day costs.
While it is true that these loans can help with many situations, it is essential to know that interest rates are incredibly high — as much as 20-60 percent. As a result, you need to be prepared for the financial impact that this may cause on your case and your life.
What Options are Available If This Loan Fails?
Suppose personal injury settlement loans are not available to you or are not approved by a lender. In that case, there are a few other loan types and steps that you can take to ensure that you get financial help during a rough and challenging period. Personal loans are the most common approach because they provide you with good cash that you can use to pay bills. These loan types include:
- Secured Loans — Backed by collateral, these types usually have lower interest rates, but your collateral can be taken from you if you default on the loan at any point.
- Fixed-Rate Loans — The interest rates on these loans are fixed at a specific rate, meaning you don’t have to expect sudden increases. Variable-rate loans are the opposite.
- Debt Consolidation Loans — If you have many debt sources that you want to compile into one payment, use this method to cut back on your costs considerably.
- Co-Signed Loans — When your credit is poor, and you can’t get a standard loan, you can get one co-signed by another individual to boost your success chances.
If all else fails, you can also apply for credit cards to pay for expenses, though this option usually results in the highest interest rate. Some other shady sources of money include payday loans and pawn shop advances, though these should only be used if your situation is desperate. These cash courses usually have intensely high-interest rates and can capture you in a rather nasty repayment cycle.