One of the nice parts about being involved in a personal injury lawsuit is that you probably will not have to pay your lawyer anything until the case settles. The downside is that it can take months or years for this to happen. While you are waiting for your case to settle so you can receive the compensation you are entitled to, it may be hard to survive financially. This is why many people turn to personal injury loans while they wait. If you are in this situation, there are several things you should know before taking a loan.
You Need Your Attorney's Approval
Most of the companies that offer personal injury settlement loans will not issue these loans without the consent of the attorney handling the case, and there are several reasons for this:
- The attorney's consent proves there is a valid case going on right now.
- Your attorney can testify that there is a high chance you will win the case.
- Your attorney can testify as to approximately how much money you will receive through your settlement.
- The attorney will know about the loan, which will ensure it gets repaid when the settlement arrives.
Without your attorney signing a form for you, the loan company may decide to deny your loan request.
You Should Shop Around
Before you decide to get a personal injury settlement loan, you must shop around. There are hundreds of companies that might be willing to give you a short-term loan while you wait for your settlement, but these loans are not all equal. As you shop around, you should compare:
- The amount of money the company will loan you – Personal injury loan lenders typically only lend around 10% of the expected value of a case. If you are expecting to win $100,000, a lender might offer to loan you $10,000.
- The interest rate of the loan – The rates on these loans can vary, but they are commonly between 30% to 120%.
- The due date and terms – Most companies allow you to repay the loan whenever the settlement arrives, but there might be differences with the terms. For example, some companies may stop adding interest after a certain amount of time passes, but others will not.
Shopping around will help you find the best deal, and you can always ask your personal injury lawyer to look over an offer you have. This is a good way to ensure you are getting a fair loan.
You Do Not Have To Worry About Your Credit
The third thing to know is you will be eligible for a loan even if you have bad credit. The lenders that issue personal injury loans do not care about a person's credit. In fact, they probably will not even look at your credit report when they offer you the loan. The loan is strictly based on the predicted amount of money you will receive through your lawsuit settlement. Of course, the lenders also take into consideration the chances that you will win the case.
Another benefit is you do not have to worry about repaying the loan if you lose your case. In fact, after you receive your settlement, your lawyer will deduct all medical bills, other bills, and legal fees. If there is not enough money left to pay off the entire personal injury loan, you will not have to pay it all, yet the account will be considered paid in full.
Getting a personal injury loan can help you get through this time period financially, but you should always discuss this with your lawyer before going through with it. To learn more, contact a personal injury lawyer today.