Are Interest Rates Excessive When Obtaining Your Lawsuit Loans Or Settlement Loans?
Very frequently, individuals find themselves in need of financial assistance following injury sustained as a result of injuries caused by another's negligence (e.
g.
, car accident).
These individuals, at least in many instances, have heard of lawsuit loans and settlement loans, but have also heard that interest rates associated with obtaining such lawsuit funding are excessive.
In this article, we'll explain why that is a myth.
In the first place, there are no interest rates associated with litigation funding.
The form of funding obtained is referred to as "non-recourse.
" This simply means that if you obtain funding and you do not prevail in your underlying claim, there is nothing for you to repay.
However, there are fees associated with obtaining both lawsuit loans and settlement loans.
These fees are contingent on the amount of "risk" inherent in each case.
(Most funding companies will rely on this calculation.
Unfortunately, many unscrupulous funding entities just have set fees, irrespective of the amount of risk inherent in the particular case.
) Simply stated, the greater the risk of in any particular case, the greater the amount of fees customarily associated with any funding obtained.
If one were to stop to think about why it is that way, it would be readily apparent that the entities that advanced the monies requested place themselves at risk in doing so.
These companies have to assess the strengths and weaknesses of the cases presented.
They also will look at the attorneys who represent the individuals requesting such funding.
It will also be necessary for the entities to assess the ability of the individual who caused the harm to pay any settlement that may be awarded to that particular plaintiff.
In many instances, an insurance carrier will be involved and the risk to the entity advancing either the lawsuit loan or settlement loan will have a fairly good idea as to what the likelihood is of being able to recoup any fees associated with the risk by the following factors: (1) type of coverage provided; (2) facts surrounding the case; and (3) the attorney' s and plaintiff' s willingness to cooperate in the investigation of the claim.
If any of the foregoing factors is absent, the likelihood of obtaining the requested litigation funding will be significantly diminished.
The more rapidly the funding entity is able to obtain requisite documentation, the more rapidly they will be able to determine whether your claim is worthy of the money requested.
Roadblocks that are placed in these negotiations are suggestive of questionable claims.
Remember, the funding entities have quite a bit of exposure when advancing the funding.
It isn't wise to do anything to increase the entity's apprehension when attempting to obtain financial assistance from them.
It is also important to realize that any risk-fees associated with either lawsuit loans or settlement loans are often minuscule when compared to the advantages provided to the plaintiffs.
In many instances, without this financial assistance, the plaintiff would be unable to pursue the claim.
Even if the plaintiff were able to pursue the claim, without that funding, plaintiffs often find themselves feeling pressured to settle for unreasonable amounts to preclude ongoing delay due to their inability to either pay medical expenses or other fees associated with the litigation.
g.
, car accident).
These individuals, at least in many instances, have heard of lawsuit loans and settlement loans, but have also heard that interest rates associated with obtaining such lawsuit funding are excessive.
In this article, we'll explain why that is a myth.
In the first place, there are no interest rates associated with litigation funding.
The form of funding obtained is referred to as "non-recourse.
" This simply means that if you obtain funding and you do not prevail in your underlying claim, there is nothing for you to repay.
However, there are fees associated with obtaining both lawsuit loans and settlement loans.
These fees are contingent on the amount of "risk" inherent in each case.
(Most funding companies will rely on this calculation.
Unfortunately, many unscrupulous funding entities just have set fees, irrespective of the amount of risk inherent in the particular case.
) Simply stated, the greater the risk of in any particular case, the greater the amount of fees customarily associated with any funding obtained.
If one were to stop to think about why it is that way, it would be readily apparent that the entities that advanced the monies requested place themselves at risk in doing so.
These companies have to assess the strengths and weaknesses of the cases presented.
They also will look at the attorneys who represent the individuals requesting such funding.
It will also be necessary for the entities to assess the ability of the individual who caused the harm to pay any settlement that may be awarded to that particular plaintiff.
In many instances, an insurance carrier will be involved and the risk to the entity advancing either the lawsuit loan or settlement loan will have a fairly good idea as to what the likelihood is of being able to recoup any fees associated with the risk by the following factors: (1) type of coverage provided; (2) facts surrounding the case; and (3) the attorney' s and plaintiff' s willingness to cooperate in the investigation of the claim.
If any of the foregoing factors is absent, the likelihood of obtaining the requested litigation funding will be significantly diminished.
The more rapidly the funding entity is able to obtain requisite documentation, the more rapidly they will be able to determine whether your claim is worthy of the money requested.
Roadblocks that are placed in these negotiations are suggestive of questionable claims.
Remember, the funding entities have quite a bit of exposure when advancing the funding.
It isn't wise to do anything to increase the entity's apprehension when attempting to obtain financial assistance from them.
It is also important to realize that any risk-fees associated with either lawsuit loans or settlement loans are often minuscule when compared to the advantages provided to the plaintiffs.
In many instances, without this financial assistance, the plaintiff would be unable to pursue the claim.
Even if the plaintiff were able to pursue the claim, without that funding, plaintiffs often find themselves feeling pressured to settle for unreasonable amounts to preclude ongoing delay due to their inability to either pay medical expenses or other fees associated with the litigation.
