Pre-Settlement Funding for All California

Be aware of the risks posed by lawsuit loans!

A lawsuit loan gives you the necessary funds while you wait for your settlement to come to a conclusion. These are required for paying your expenses such as rent, mortgage, or even medical expenses if you encounter an accident. Also referred to as lawsuit lending and litigation financing, a lawsuit loan may be of help if you are seriously injured or financially burdened. Your expenses will be covered until a decision is reached in your injury case, and you can repay the loan after the case is closed.

If your recovery isn’t expected until a few months, and you can’t work during this time, then you may want to take advantage a lawsuit loan.

However, as attractive as they seem, keep in mind that lawsuit loans involve certain risks as well which you should be well aware of before you sign up for a lawsuit loan.

High Interest Rates

When you pay your lender from your settlement proceeds, you pay the principal amount and interest. These interest rates are high, and are the biggest risk associated with lawsuit loans. Your interest rate can be anything between 27% and 60% depending on lifetime of the loan. Before you take the loan, find out the expected duration of your case. Get a reliable estimate, because your interest will largely depend on it. You pay more in terms of interest if your case is prolonged. Personal injury loans can go on for months and even years. In some cases, you may even have to go through a trial, which can incur greater interest.

For instance, if you take $25,000 as loan, then you may have to pay an interest amount of $12,500 if your case takes a year to settle. And, if your case lasts for two years or more, you will be paying $32,000 because interest is compounded on a monthly basis.

Please note that you won’t have to pay more than the money you get from settlement.

Huge Charges

Lawsuit loans typically charge exorbitant fees. Generally, your lender would require you to pay for an application, administration and processing fees, which usually add up to a significant amount. Calculate the total fee that you would be paying, and try to negotiate with your lender, in order to reduce the amount.


Not every case qualifies for a lawsuit loan. You can get a loan only when the lending company is confident that you would settle or win the case. This is because you don’t have to repay the loan if you lose, which puts your lender at risk.


Lawsuits loans are not regulated strictly, which may lead to legal problems.

So what can you do?

Try to get funding through other means, such as pre-settlement funding, before opting for a lawsuit loan. Consider your health insurance or disability payments, or ask your friends and family, if they can lend you some cash. You can even approach a neighborhood bank or credit union for an installment loan.

Pre-settlement funding is a much safer alternative to lawsuit loans. Call FCA Legal Funding to learn how we can advance you the cash you need to cover your expenses: (310) 424-5176.

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