18-Feb

What’s The Difference Between Pre-Settlement and Post-Settlement Funding

When it comes to case funding, there are two major types: Pre-settlement and post-settlement funding. For those unfamiliar with the terms, it may sound a bit confusing so we will explain the difference. Knowing how these types of funding differ will help you determine which one you would benefit from the most.
Depending on the lawsuit, one type of funding may be better than the other.

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What Is A Pre-Settlement Lawsuit Loan?

A pre-settlement lawsuit loan is a loan given to plaintiffs before the case is settled in court. This means that there is a lot more risk involved because the decision hasn’t been made, the plaintiff doesn’t know whether they will win the case or not.
The person requesting a lawsuit loan (with the help of their lawyer) has to show to the lawsuit loan company that they can win the case.
As these loans are risky, there are usually higher fees attached to them. While a case that is already settled gives clear numbers in terms of what the settlement amount will be, an ongoing lawsuit does not. This means that the lawsuit loan company has to determine whether your case is worth taking the risk.
Pre-settlement loans are risky for all parties involved: the person requesting it and the lawsuit loan company in question. If the plaintiff wins the case, they will pay back the loan. If not, they won’t be required to pay back the money. That is why each lawsuit loan company will carefully analyze your case to determine whether you are likely to win before giving you the loan.

What Is A Post-Settlement Lawsuit Loan?

A post-settlement lawsuit loan carries less risk for everyone involved as the case has already been settled and a decision has been made. The plaintiff has won the case and will receive financial compensation. It is only a matter of time when the payment will arrive.
Sometimes, people can’t afford to wait for the settlement money so they reach out to lawsuit loan companies for help.
A lawsuit loan will most likely approve your loan while you wait for the settlement payment. Once the plaintiff receives the settlement money, they pay back the loan and whatever is left is theirs to spend as they like.
Post-settlement loans are indeed loans and the money is paid back always along with an interest fee. It just carries less risk as the case is already settled. The amount you can get as a post-settlement loan depends on the type of case and how much did the plaintiffs in similar cases win. Sometimes, a plaintiff’s crest score may be checked to determine whether they would be able to make the payments to the lawsuit loan company when the time comes.

What Does The Difference Between These Really Mean?

Each of these types of loans carries different levels of risk. However, pre-settlement loans much riskier than post-settlement loans. This is because, as we already explained, the case has not settled yet and no one can guarantee a win.
But the type of loan you will end up taking depends on your situation. There lies the true difference between these loans. Some plaintiffs face mounting bills, legal fees, and other expenses they cannot cover in order to go on with their lawsuit. They desperately need financial help. In these cases, a pre-settlement loan can mean a world of difference. They can use the money to pay their attorney, cover medical bills and living expenses as they wait for their case to be settled. This allows them to continue their legal battle.
If you are not in a financial strain and you are able to cover your bills without any help, you don’t need a pre-settlement loan. However, if your case has been settled and you know there’s money coming in but you don’t know when and can’t wait for it, a post-settlement loan is a right choice. Since you know exactly what your settlement amount is, you can take a smaller loan so that when the money comes, you can pay back the loan along with the interest rate, and have some money left.

The difference between pre-settlement and post-settlement loans is in the level of risk they carry. Deciding when and what type of loan you need depends on you. However, you should consult your lawyer to help you make the right decision.

A Great Place To Get More Lawsuit Loan Help

When more help is needed, a great place to turn to is Delta Settlement Funding.