If you're expecting a lawsuit settlement award you might be feeling frustrated with the slow pace of the legal process. Many injured persons have to go through lengthy court hearings or trials before they find out if they're getting a settlement. Even those who win their cases may have to wait months or years before the money is actually released to them. If you need to get access to your settlement funds right away you might consider settlement funding, an advance option that gives you immediate access to the funds you'll eventually receive from your lawsuit. Here are the basics of settlement funding.
About Settlement Funding
Settlement funding is a form of cash advance financing that allows you to get an upfront payment on your pending settlement award. This option is often useful for those who are awarded an injury settlement since these individuals often have to pay their own medical bills and household expenses while they're waiting for the appeals process to end. Many settlement funding companies allow approved clients to get their funds within 24 to 48 hours after approval.
How Settlement Funding Works
Technically, settlement funding is not a loan so there's no need for a good credit history. Rather, the money is simply an advance on the amount you will eventually receive from the settlement. If you are approved for funding you're not selling off your entire settlement. Instead, you'll remit the amount you received as an advance after you receive your award. Some settlement funding companies allow recipients to forgo any monthly payments until they actually receive their settlement which keeps these individuals from sinking further into debt while they wait for their case to be resolved. One of the biggest advantages for settlement funding is that if your financing request is approved and you lose your case you won't have to repay the advance amount.
Comparing Settlement Funding Fees and Charges
Like many other upfront and advance financing programs settlement funding is rather expensive when compared to more traditional forms of financing such as bank loans and credit cards. Since settlement funding is not a form of lending finance companies do not have to follow federal laws on usury and can charge far higher fees and interest rates than traditional lenders. Because these plans can be so costly it's wise for interested persons to exhaust all other forms of financing before considering settlement funding.
Those who are in need of fast cash while they wait for their lawsuit settlement may benefit from obtaining settlement funding. If you get to know the basics of settlement funding you may find it to be a useful form of legal financing for you and your family. You can find out more information by speaking with a small business funding professional.