Who Is a Good Candidate for Pre-Settlement Funding?

If you’re waiting on a legal settlement, you might be in a tough financial position. You might have stacks of medical bills coming in, with uncertainty on whether or not you’re going to get a settlement – or when that settlement might arrive. Your typical household expenses, including your mortgage, your groceries, and your utilities, will continue to roll in. And on top of all of it, you might be out of work or working less than usual due to your injuries.

One option available is pre-settlement funding, giving plaintiffs immediate access to capital in exchange for a portion of their future settlement proceeds. But who is a good candidate for this type of loan?

Pre-Settlement Funding: All the Basics

Let’s start by explaining the basics of pre-settlement funding. What exactly is this financial tool, and how can it help you?

Pre-settlement funding can be described as a kind of loan. People in a position to win a settlement, often in a personal injury case, can take out this loan as a measure of short-term financial relief. You’ll be granted a sum of money, based on the projected value of your case, within a few days of applying. From there, you’ll be able to use the funding for anything you want – including paying off medical bills, making your mortgage payment, or even treating yourself to a few nice things as you recover.

When your actual settlement arrives, you’ll be responsible for repaying the loan, plus a fee. Some pre-settlement funding providers charge an interest rate, like with a traditional loan, but with Capital Now Funding, you are only charge a one-time fixed fee. If you don’t receive a settlement, you won’t be responsible for repaying the loan.

What Makes a Good Candidate for Pre-Settlement Funding?

So how do you know if you’re a “good” candidate for pre-settlement funding?

Good candidates are those who:

  • Qualify, meaning they can actually get access to the loan without much trouble.
  • Can make use of the loan, meaning the fixed fee is worth paying if it means getting access to quick capital.

Generally, that means good candidates include those with:

  • Adult age. Generally speaking, only people of adult age will qualify for pre-settlement funding, as underage individuals can’t pursue legal action on their own.
  • A strong case. You also need to have a strong case, with good chances of winning a decent settlement. Remember, if you don’t win a settlement, you won’t have to pay back the loan – which means lenders are risking a lot by lending money to people without solid chances of victory. Before you’re granted pre-settlement funding, your lender will review your case, including the status of the case, the evidence you’ve gathered, and other factors, to see if you have a strong probability of success.
  • A good lawyer. In line with this, you’ll need to have a good lawyer on your side. During the application process, you’ll need to name and provide contact information for your lawyer of choice. If your lawyer is experienced and competent, you shouldn’t have anything to worry about here; your lender just wants to make sure you have a professional on your side. If your lawyer doesn’t have any experience, or if their credentials are questionable, you may not qualify for pre-settlement funding.
  • Any credit score. Here’s some good news; if your credit score is low or if you don’t have a credit score, you may still qualify for pre-settlement funding. With a traditional loan, banks will often require you to have a minimum credit score in place – or they’ll change your interest rate based on what your credit score is. That’s not the case with pre-settlement funding.  Your credit score is not a factor in determining your approval for pre-settlement funding.
  • Any financial background. Similarly, you don’t need to have any specific financial qualifications to be approved for a pre-settlement loan. Your lender often won’t care how much current debt you have, what your income is, or other similar factors. Traditional lenders typically look at your income, debts, assets, and other financial variables to prove that you’ll eventually be able to pay the loan back. For pre-settlement funding providers, the only repayment variable that matters is whether or not you’re going to win a settlement; since that settlement money is predicted to arrive, pending your approval, the other variables are inconsequential.
  • Limited or no working capacity. If you’re currently working and making a good income, you may not need outside financial assistance. You may be able to keep up with your bills and make ends meet for the next several weeks and months as you wait for your settlement to arrive. But if your injury has rendered you unable to work, or has limited your capacity to work, you’ll be in a prime position to take out a settlement loan to cover your expenses.
  • Mounting expenses. You’ll also be in a position to benefit from a pre-settlement loan if you’re facing mounting expenses. Ideally, your settlement will be capable of paying off all your medical bills and debts – but those bills will still be coming in while you wait for that settlement, on top of all your daily living expenses. If you’re finding it tough to make ends meet, you might be an even better candidate for pre-settlement funding.

Are There Risks of Pre-Settlement Funding?

All these qualities can make you a great candidate for pre-settlement funding, but are there any risks with this financial product?

The short answer is yes, but only if you’re working with an untrustworthy provider. Always do your research and make sure you’re working with a provider that charges a reasonable rate and preferably a fixed fee.  Also always make sure the funding provider is transparent with their pricing and doesn’t require you to pay the loan back if you don’t get a settlement.

Do you feel like you’re a good candidate for pre-settlement funding? Or are you just interested to learn more about how this type of loan could help you? Apply now to find out if you’re a good fit – and potentially get the cash you need in just a few days.