Struggling Financially during Your Personal Injury Litigation? You May Be Eligible for a Lawsuit Loan

Being injured in an accident can put stress on you and your family in a number of different ways. First of all, there is the stress of litigation which can take a long time to resolve. Then, as the days pass by, your legal expenses can pile up, and the pressure on you will increase. Furthermore, if your injuries are significant and you cannot work, you will be unable to earn money to pay your bills.

If you cannot obtain the financing you need from your bank, credit union, or family and friends, you may be left with no option but to accept a settlement for much less than what you actually deserve. However, if you can obtain a lawsuit loan, you will be able to pay your bills and hold out for the compensation you deserve.

What is a Lawsuit Loan

With a lawsuit loan, you are basically borrowing money against the money that you expect to receive when you win or settle your case. Many personal injury clients obtain lawsuit loans to pay for the large medical expense that they have incurred as a result of their injuries. But, the money can also be used to pay for living expenses, other loans and/or legal fees.

A lawsuit loan is different from a traditional loan in that you (the plaintiff) bear no risk. When you obtain the loan, you will not be obliged to repay it unless you get a settlement or win your case and only to the extent that the settlement provides you with the enough funds to pay. So for example:

Let’s say that you receive a lawsuit loan of $25,000 at 3% per month. A year later you settle your case for $100,000.  After attorney’s fees of and medical liens you may, for example, be left with $50,000 from which you will be required to pay back the $25,000 plus approximately $12,500 in interest fees. This will leave you with $12,500 after paying back the loan.

On the other hand:

If your case took two years to settle instead of one, you would owe the lender $32, 000 in interest rates plus the $25,000 principle. Subtract that from the $50,000 you have left after paying your attorney’s fees and medical liens and you are left with a deficit of -$7,000, which you would not be obliged to pay. Likewise, if you had not won your case or received a settlement, you would not be required to pay back the loan. The loan provider would have to incur the entire loss.

How to Qualify For a Lawsuit Loan

Lending companies that specialize in lawsuit loans take a huge risk each time they give this type of loan. So, they will only grant you a loan if they are confident that your case will be won or settled successfully.

In order to gain this confidence, they will contact your attorney and obtain as much information about your case as possible.

In addition, a loan provider will typically require you to prove that you have been injured in a personal injury accident and to have the approval of your attorney before applying for the loan.

You and your attorney will also be required to sign a lien against your settlement, guaranteeing that you will repay the loan once your case has been won or settled.

How Much Will a Lawsuit Loan Cost You?

Lawsuit loans generally have higher interest rates than other types of loans. Ordinarily, between 2 and 4% per month or 25 – 60% per year, depending on which lawsuit loan provider you choose.

This is a much higher rate than for other types of loans, chiefly because lawsuit loans are riskier for the lender than more traditional loans: Firstly, because there is always the chance that you might not win your case, or receive the settlement you are demanding; Secondly, because you (the borrower) you will not be obliged to pay off the lender if the settlement is less than you expected or if there is no settlement as all; And finally, because it may be quite a long time before for the lender is repaid.

However, regardless of the provider you choose or the rate you receive, the longer it takes to settle your case, the more money you will owe when your case is settled. On the other hand, if you don’t win your case or receive a settlement, you won’t owe anything at all.


Personal injury lawsuits can be stressful and expensive, and it can take a long time for your case to settle. Meanwhile, how do you pay your bills and meet your day-to-day expenses? If you cannot obtain the financing you need from your bank, credit union, or family and friends, rather than ending up in financial ruin, you can apply for a lawsuit loan to get you by until you receive your settlement.

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