If you find yourself short on cash to cover your bills and expenses while pursuing a personal injury lawsuit, a lawsuit loan should be an absolute last resort. Here are the top three reasons you should avoid a lawsuit loan, if at all possible.
#1: It's A Lot Of Extra Work For Your Lawyer
If you want to apply for a lawsuit loan, its not only a lot of paperwork for you, it involves a lot of paperwork for your lawyer. Most lawsuit loan companies want substantial information about your case before they will agree to give you a loan. They want to make sure that the probability of your winning your case is extremely high before they agree to give you a loan.
That means instead of working on your case, your lawyer is going to have to divert time and attention away from what they want to be doing to fill out the loan paperwork. It could take half a day or more away from your case. Additionally, most lawyers do not enjoy doing this type of paperwork or engaging with lawsuit loan companies.
#2: The Interest Rates Are Extremely High
The interest rates are generally much higher than traditional loans. You'll end up paying more for this loan than you would for a loan through your personal bank or local credit union. Additionally, the interest on your loan will continue to accumulate until you win your settlement. Since you don't have control over when your case will be settled, you could end up forking over a lot more for that loan than you planned on when you first took it out.
#3: It Will Reduce Your Settlement
Finally, taking out a lawsuit loan will ultimately reduce your settlement. The following expenses will already be taken out of your settlement:
- Legal Fees
- Attorney's Costs
- Medical Bills
If you take out a lawsuit loan as well, that will be deducted from your settlement. Depending on the size of the loan and the amount of interest that accumulated, you may not be left with any money after your fees, bills and loan are all settled.
If you can avoid it, try to everything you can to not take out a lawsuit loan. If you need money to tide you over until your settlement, see if you can get a loan through your local bank or credit union instead. A lawsuit loan will eat away at your settlement and take your personal injury lawyer away from working on your case.Share