We know that if a person wants to get a loan from someone, he has to pay it back. But in case of a pre-settlement lawsuit loan, you don’t need to pay it back, that’s why we can say that it is not an actual loan. So, we can define a pre-settlement loan as “it is a cash advance on an expected settlement or verdict in a pending legal case.” When a person files a lawsuit and then apply for a loan from a lawsuit funding company, the company will evaluate your legal claim and lend you money on the estimated value of your application. These loans are safe because you don’t have to pay back the loan in case you lose the case.

If you are waiting for the resolution of your injury case, a pre-settlement lawsuit loan will allow you to meet your growing financial obligations. Lawsuit loans are very beneficial, but they have their costs also. Keep in mind that filing a lawsuit loan can be expensive, and it also can take much time, but if you need money for your lawsuit, a pre-settlement lawsuit loan will be a good option for you.

How does a pre-settlement lawsuit loan work?

If you are going through from a personal injury or loss due to someone’s else negligence, you may need money immediately to cover your damage or to pay medical bills. First, you have to file a lawsuit if you want to apply for a pre-settlement lawsuit loan. You will only be eligible for a pre-settlement advance from a lending company if your case has been filed in the court. When you file application for a lawsuit loan, the lending company will contact your attorney and get information about the incident to evaluate it.

After reviewing your case, the lending company will tell you whether your application for a pre-settlement loan is approved or not. The lawsuit loans are very safe as there is no risk that if you lose the case, you don’t need to pay back the loan. For this reason, the lending company wants to get the security that your case has individual chances of recovery. The lending company carefully examines your claim for a lawsuit so that they might not suffer from the loss.

After approving the application, the lending company evaluates the amount of advance depending upon the value of your legal claim. You will not get the whole amount of loan because the lawyer will take his fee that is usually 1/3 of the total amount of loan. In case of personal injury, medical bills are also paid from the lawsuit loan. The advance money is immediately provided to you after approval. Usually, you can receive your lawsuit loan within 24 to 48 hours.

If you won the lawsuit and recover the proceeds (either by settlement or by court order), you will have to pay the principal amount and decided fees or interest as per the agreement.

You can also say that the lawsuit loans are like a funding company is purchasing some part of your future settlement proceeds.

Things need to be considered

Lawsuit loans are risk-free and a good option for you because it helps you in meeting your financial needs while you are trying to proceed for your case. While the lawsuit is very beneficial, there are some risks also. Whenever you want to buy a lawsuit loan, consider these suggestions to avoid any risk:

• Always ask about the application charges

• Ask the lending company about the interest rates

• Ask the funding company for a written agreement with all terms and fees mentioned in it

• Ask your attorney while choosing a pre-settlement lawsuit funding


A pre-settlement advance is beneficial to meet the necessary living expenses if you are waiting for the result of your legal case. Lawsuit loans make you stand on a more reliable place because you have no fear of loss. You have the assurance that in case of losing the case, you are not going to bear any loss. Sometimes the defendant’s lawyers use other methods to give pressure to reduce the settlement amount, and if you qualify a pre-settlement lawsuit loan, you are on the safe side.