What is a Medical Malpractice Lawsuit Loan?
With a medical malpractice lawsuit loan, a lender advances money to you against the settlement you expect to receive from the lawsuit. These are popular with plaintiffs who have lost income or have large medical expenses due to an injury. You may seek a medical malpractice lawsuit loan to cover medical bills, living expenses, mortgage payments, car payments and more.
Advantages of a Medical Malpractice Lawsuit Loan
Here are the two main advantages to a lawsuit loan.
1. A medical malpractice lawsuit loan can help tide you over. It can provide you with breathing room if expenses are continuing to grow. They cover mortgage payments, living expenses, medical bills and car loan payments while you pursue the lawsuit.
2. Funding the litigation may give you more time to negotiate a better settlement. If you need the settlement to pay for needs or cover lost income, you may be tempted to settle early. A lawsuit loan can give you time to wait for a better offer. You don’t want to prolong the litigation. However, you want a fair result. A lawsuit loan may relieve your financial stress, and your attorney can better negotiate a fair settlement. If the defendant does not offer a good settlement, the loan gives you the money to proceed to trial.
What About Other Options?
You could approach your local bank, credit union or other financial institution for a loan. However, an installment loan will charge you interest. In addition, you will need to pledge collateral in many instances like your home or 401(k) account. Ask yourself if you really want to risk your home or retirement funds as you do your research on options to litigation funding.
Can You Qualify for a Medical Malpractice Lawsuit Loan?
The lender is taking significant risks in making a medical malpractice loan. It’s possible that you could lose at trial or settle for less than you originally expected. Therefore, a lender will make a medical malpractice lawsuit loan only when it is confident that you will settle your case for a substantial amount or win the case in court.
When you apply, the company will contact your lawyer to gather information about the lawsuit to evaluate your case. This process can sometimes take several weeks. Your attorney will need to cooperate as well. Typically, you will need to do a little follow up with both the attorney and the company to ensure the lender has the information it needs to render a decision.
Shopping Around for the Best Medical Malpractice Lawsuit Loan Terms
When you are ready to contact several lawsuit loan companies, check out the following:
1. Compare interest rates. These are sometimes called funding fees. The rates may vary considerably, and typically it won’t be advertised on their websites. Some companies may want to evaluate your case prior to quoting a rate. Ask about any application fees. Some lenders charge a fee to evaluate your case, but some may consider it for free.
2. Ask how frequently the interest is compounded. Some lenders compound monthly while others may compound interest more frequently. Compounding means that you pay interest on the interest. Therefore, the more frequently the lender compounds the interest, the more you will pay once your case is concluded.
3. Confirm that you will not pay more than the settlement or award amount. Double check their policy if you lose the case. You should not owe any money in that circumstance.
Applying for a medical malpractice loan does not obligate you to anything. Be sure to read the contract thoroughly. You will find many medical malpractice lawsuit lenders, and each has its own terms. Be sure you understand them. A lawsuit loan is a popular financial tool and can help you during a difficult time.