One of the issues our clients face when pursuing car accident claims is the need for money as the case progresses. It can take a year or more to settle a contested car accident claim. The bills from medical providers and others may be accumulating. An injured person who is out of work awaiting a medical and financial recovery after a car crash can find themselves experiencing financial stress.
One way to relieve financial pressure while awaiting a car accident settlement is to take out a pre-settlement loan. These loans use the expected value of a forthcoming settlement as collateral to provide an advance to the injured individual. When the case is resolved, the amount of money advanced, plus fees and interest, is taken out of the settlement.
Whether to take out a pre-settlement loan, which is also referred to as an accident loan or lawsuit loan, should be carefully considered. The primary issue is that they come with very costly interest rates. Because it is technically a cash advance and not a loan, interest rates are not regulated. Your entire settlement could go to pay off a pre-settlement loan. On the other hand, if your case does not result in a monetary settlement, the loan may be forgiven.
Below, we discuss taking a loan on a car accident settlement. Before you apply for a car accident loan, you should review the status of your case with your car accident attorneys. You must have an attorney handling your case to obtain a car accident loan. The company making the loan will need assurances from your attorneys that the case is likely to settle.
If you have been injured in a car accident in Indiana that was not your fault, contact the experienced car accident attorneys at Craig, Kelley & Faultless LLC as soon as you can for legal assistance. We will work to build a compelling case for compensation for you and to conclude your case as quickly as possible. Allowing us to review your case and set the legal process in motion within the first few weeks following your accident can lay the foundation for a successful claim.
An initial legal consultation with Craig, Kelley & Faultless LLC is free. Our attorneys do not charge for our services unless we obtain money for you. Contact us now.
What You Need To Know About Car Accident Pre-Settlement Loans
If you are considering a loan as you await the settlement of a car accident claim, our first piece of practical advice is to determine whether you have other sources for the money you need now. For example, if you have health insurance, you may be able to use it to pay some of your medical bills. Some policies specifically cover accidents and emergency services.
You may have savings, certificates of deposit or other assets you can borrow emergency cash against that are more attractive than a pre-settlement loan.
You should speak to your creditors about your situation. Many medical providers are flexible with patient payments, particularly if they are informed that you are awaiting an expected insurance settlement. They may allow you to pay bills through a payment plan or defer payments until you receive your settlement.
If you are a client of Craig, Kelley & Faultless LLC, we can contact your creditors to advise them that we are handling a claim for you and that we expect a settlement for you. We cannot loan clients money. But because of our years of legal experience across Indiana, our assurances to creditors on behalf of our clients can often ease concerns about being paid.
Here are four facts to know about car accident pre-settlement loans:
How To Quality For A Pre-Settlement Loan
To look into the possibility of obtaining a pre-settlement loan on your car accident settlement, first search online for “pre-settlement loans Indianapolis” or “Indiana.”
Read any information a company provides carefully. Some lending companies are predatory and take advantage of people in desperate situations by charging excessive fees. Some companies charge reasonable rates to help people.
A loan specialist will need information about your case to assess your eligibility for a loan, including:
- The type of accident you were in
- Your injuries
- Where, when, and how the accident happened
- What you currently owe doctors and hospitals
- Whether any medical providers have asserted liens against your case
- Name of the insurance company
- Amount of money the insurance policy provides
- Your attorney’s name
You must be represented by a personal injury lawyer willing to cooperate with the lawsuit cash advance company.
If you qualify, there are no restrictions on how you use money from a pre-settlement loan.
How Much You Can Get in a Car Accident Pre-Settlement Loan
Any case loan you receive will be based on what you might receive as a settlement, which is dictated by the insurance coverage held by those at fault for the accident. Some companies will advance no more than 10% of what insurance provides.
To weigh the risk of providing the loan, the loan company will also consider the type of case (car accident cases are good for obtaining loans because they tend to settle), how long the loan will be outstanding, and other factors.
How Much A Pre-Settlement Loan Costs
Pre-settlement loans are costly. Companies typically charge interest rates of 3%-4% per month, which amounts to 36%-48% annually. Then you must consider the length of the loan.
Regardless of how quickly your case settles and you repay the loan, the loan company will likely charge a minimum of 6 months of interest. Some car accident cases take a year or longer to resolve.
One company that brokers pre-settlement loans estimates that you’ll pay back 2 to 5 times the amount you borrow, depending upon how long it takes to settle your case. This money comes out of your settlement, and so do the attorneys’ fees and case expenses. You could find yourself owing money instead of your car accident lawsuit settlement making you financially stable.
Can a Pre-Settlement Loan Be Forgiven If I Lose My Case?
Some pre-settlement cash advances do not have to be paid back if you lose your case. But not all companies do this.
You need to be sure you understand the terms of any lawsuit loan agreement before you sign the contract. Your personal injury attorney can review the contract for you if you are not certain of what it requires.
Contact Us For A Free Case Review
If you or a loved one has been seriously injured in a car accident in Indiana, a knowledgeable Indiana car accident lawyer at Craig, Kelley & Faultless LLC can help you understand your legal options for seeking a settlement or jury award. We offer a free, no-obligation legal consultation. If we see an opportunity to move forward with a claim on your behalf, we will offer to represent you on a contingency fee basis. We will not owe any legal fee unless you receive compensation through a settlement or court award.
Contact us now at (800) 746-0226 or online for your free case review.
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