Benefits Of Lawsuit Loans Compared To Bank Loans And Other Funding Sources
Considering the long history of ways in which plaintiffs have been able to find funding for a lawsuit, lawsuit loans are actually a fairly recent trend. Before pre-settlement funding was the reliable litigation financing method that it is today, Plaintiffs were forced to turn to other methods as a way to fund their lawsuits. And we say forced because they literally had no choice in the matter – there was just no alternative method available. The main choices litigants had in financing their lawsuits were to get a personal loan, a new credit card, borrow against a mortgage, or borrow against a 401K.
These methods of litigation financing are still available today, but we’re unsure why any plaintiff would want to use them considering lawsuit loans have proven to be the better option. If you’re still hesitant on whether or not settlement funding is everything it’s cracked up to be, deltasettlementfunding.com can’t wait to show new plaintiffs how much relief they’ll find by using Lawsuit Loans vs Bank Loans and other funding sources. Opponents to Lawsuit Loans have made claims that they have their own inherent risks, however we would like to prove to our future clients that this is not the case in comparison to other forms of lawsuit finance.
Taking Out A Personal Loan
Plaintiffs who have never tried Lawsuit Loans before might first consider taking out a small personal loan with their regular bank or credit union. On it’s face, it doesn’t seem like that bad of an idea. A personal bank is familiar to the plaintiff, and in most case they already have a relationship with that institution. That said, personal loans can lead to plaintiff financial suffering once their trial has ended, and anyone looking into receiving a loan from their financial institution should properly weigh all of the pros and cons in the decision to commit to a personal loan.
The Advantages Of Taking Out A Personal Loan
We can’t deny that there are some advantages to getting a personal loan from a bank if you are a plaintiff under financial strain. Firstly, regardless of whether it is true or not, most people consider taking out a personal loan to be the more “intelligent” option; however, this statement is usually declared without even considering the downsides to a personal loan. That said, if you are a plaintiff with a credit rating that is in good standing, you may be able to receive a loan with a very low interest rate. As well, personal loans more often than not come with a fixed repayment period. In some cases – depending on their financial standing with the institution – plaintiffs may be able to spread out their repayments over a span of years, allowing a large amount of time for them to repay their debt.
The Disadvantages Of Personal Loans
Although their advantages may seem very attractive to plaintiffs in need, in our opinion they are overpowered by the disadvantages. What can’t be ignored with a personal loan is that you must have a good credit rating in order to get a half-way reasonable interest rate. As well, if you already have pending loans with other financial institutions, it may impede your ability to receive a new one.
Unlike Pre-Settlement Funding, repayment is absolutely necessary with personal loans – it doesn’t matter whether the plaintiff has successfully argued their case or not. In “loser pays” states (states in America where if a plaintiff loses their case, they must cover the defendants costs), this can be extremely detrimental. Failure to repay the loans in a timely manner can result in the loan going into debt collection. If the plaintiff finds themselves in debt collection they could have a lien put on their account, have their property possessed, or even possibly be forced into declaring bankruptcy.
Signing Up For A Low-Interest Credit Card
Plaintiffs who are in financial need may thing that signing up for a Low-Interest Credit Card may be a reasonable way to dig their way out of mounting bills. As attractive as that idea may be, we would like to show you how signing up for a credit card can be a bad idea in the long run.
Advantages Of A Low-Interest Credit Card
It’s entirely understandable why so many plaintiffs find the idea of signing up for a low-interest credit card so attractive when faced with financial pressures. In general, credit cards can have a lower interest rate than a pre-settlement loan. As well, if you find yourself lucky enough to sign up for a card with a 0% APR, it can be very useful as long as you pay it back before the end of the promotional period. Credit cards are also generally accepted everywhere, and that flexibility can be attractive if you are a plaintiff who has multiple sources of economic stress.
Disadvantages Of A Low-Interest Credit Card
Even if you are lucky enough to find a credit card with a 0% APR, if you aren’t able to pay off your charges within the promotional time limit you can expect a large spike in your interest rates. Also, much like a personal loan, repayment on your credit card is absolutely necessary. And unlike lawsuit loans, interested will continue to grow after the judgement on your case has been reached. Credit cards can also take weeks or months to be approved, and a credit check is needed. Worst of all, if you are rejected in your credit card application for any reason it can have a negative affect on your credit rating!
Borrow Against Your 401k or Mortgage
Another way Plaintiffs are able to fund their lawsuits and deal with growing financial pressures is by borrowing against either their mortgages (if they are home owners), or their 401K plans. It’s understood why this idea is so enticing to plaintiffs, but these types of financial loans can be a big mistake.
Advantages Of Borrowing Against Mortgages & 401Ks
The main advantage of borrowing against a mortgage or 401K is that you are dealing with pre-existing collateral that is already in the financial institutions system. This not only makes this type of loan easy, but Plaintiffs can receive a loan in a relatively quick amount of time.
Disadvantages Of Borrowing Against Mortgages & 401Ks
It goes without saying, but the disadvantages of these types of lending options can be detrimental to a plaintiff. If they lose their case and are unable to repay the loan it could lead to bankruptcy, seriously jeopardize their retirement savings, or even lead to their bank taking repossession of their house.
Funding A Litigious Matter Using Lawsuit Loans
Considering how recent these financial tools are to the legal market, it’s actually amazing how popular Lawsuit Loans have become! It makes perfect sense why they’re taking the legal funding world by storm – they’re easy to apply for, quick to receive, and relatively no-risk! But before we continue to tell you about how great they are, let’s name the few areas where pre-settlement loans don’t receive the highest marks.
Disadvantages of Lawsuit Loans
Plaintiffs should be sure to only use the best lawsuit loan companies (such as Delta Settlement Funding) or they may find themselves paying a very slightly higher interest rate than they would find on a personal loan. As well, the type of interest rate applied to their loan may have them see a marginally smaller return after settlement. That said, those areas pale in comparison to the benefits Lawsuit Loans hold over other funding methods!
Advantages of Lawsuit Loans
The biggest advantage of pre-settlement funding is that Lawsuit Loans are essentially RISK FREE. You are only required to pay back your lawsuit loan if you win your case – you’ll never see that with a bank loan! Not only that, but after applying Plaintiffs will usually see their loan in their bank account within 24 to 48 hours. Lawsuit Loans also require no credit check and no employment check, and – since we also will not look at your current income – they will not affect your credit rating in any way!
The Lawsuit Loan company will communicate directly with your solicitor regarding repayment, and but in the meantime you could use the cash in whatever way you would like. Loans usually fall anywhere between $500 and $100,000, and plaintiffs can receive them on top of other funding sources!
Lawsuit Loans Are Clearly The Best Way To Fund Your Case
As we’ve clearly laid out, there are very few disadvantages to signing up for Lawsuit Loans as opposed to other litigious funding methods. They may rather new to the lending market, but they are gaining popularity by the day thanks to their no-risk nature and nearly immediate approval process. Before you think about taking out a personal loan, a credit card, or a loan against your mortgage or 401K, you should definitely consider the relief plaintiffs across the country have felt specifically due to the benefits of Lawsuit Loans – Start Your Application Today and Find Out For Yourself!