Lawsuit loans are a financial solution that can benefit a personal injury case while awaiting a settlement payout. In some circumstances, refinancing lawsuit loans are a strategically advantageous move. Learn how refinancing works, if it’s the right strategy for you, and how Fund Capital America can help clients in Los Angeles, Anaheim, and other California areas.

What is Lawsuit Loan Refinancing?

A lawsuit loan provides plaintiffs with a cash advance for a pending settlement in a personal injury case to assist covering legal fees, living expenses, medical bills, and other costs.

In some cases, plaintiffs may opt to refinance their lawsuit loan if they need additional funding. Refinancing your lawsuit loan typically involves taking out a new loan to pay off the existing debt, either through the same lender or another. 

Benefits of Refinancing Your Lawsuit Loan 

Refinancing your lawsuit loan can offer several advantages, especially if your financial situation has changed or the previous loan terms are no longer favorable for your circumstances.

Change repayment terms

Refinancing your loan can offer more favorable repayment terms compared to the initial loan, such as reducing the proportion deducted from your future settlement.

Reduced interest rates

You may be able to secure a lower lawsuit loan rate than your original loan’s interest rate. This reduces the amount of compounded interest on your loan, likewise decreasing the total amount you pay over the loan’s lifetime.

Adjusted repayment period

Refinancing can allow you to shorten or extend the repayment period of your loan to suit your needs. For example, shortening the loan can help you pay it off sooner with larger principal payments and save on interest fees. Extending it often offers lower lawsuit loan payments to ease financial pressure and avoid missed payment penalties.


If you have multiple lawsuit loans, refinancing may allow you to consolidate them into a single loan, simplifying repayment and potentially reducing overall interest rates and fees.

More funding

In addition to reducing monthly payments, refinancing can provide you with extra cash flow during the litigation process, providing financial relief and better flexibility to cover costs.

Risks and Drawbacks of Refinancing

While refinancing lawsuit loans offers various financial benefits and relief, some circumstances pose risks and drawbacks.

Additional fees

Refinancing a lawsuit loan involves opening a new loan, which means you’ll have to pay processing, application, and other fees for a second time.


Some loan agreements impose penalty fees if you pay them off early with a new loan, allowing the new lender to add to the overall amount and interest fees.

Credit impact

Lawsuit loan refinancing applications may require a hard credit inquiry that can temporarily lower your credit score. Furthermore, taking on additional debt increases your credit liability and may limit your access to future lending until you repay your refinanced loan.

Extended repayment

While a longer repayment term can provide a lower lawsuit loan interest rate and monthly payment, it also means you might pay more total interest over the loan’s lifetime.

Unfavorable conditions

Market conditions can influence interest rates and lending terms. Refinancing may not be a great option when interest rates are high.

Lender reliability

Not all lenders have your best interests in mind and may engage in predatory lending practices that don’t offer the full benefits of refinancing.

Questions to Ask Before Refinancing Your Lawsuit Loan

Before refinancing your lawsuit loan, ask these key questions:

When is refinancing a smart move?

Several scenarios can make refinancing an advantageous move. Earning lower interest rates through favorable market conditions or an improved credit score, for example, can provide you with interest savings that may outweigh the cost of other loan fees in the long-term.

Ultimately, refinancing legal funding is meant to provide capital to ease the burden from medical bills, lost income, or other expenses while awaiting settlement. If your financial needs increase, refinancing can better align your funding with your circumstances.

When refinancing might be a costly mistake

Just as good market conditions can lower loan costs, refinancing during poor market conditions can increase your interest rates and cost you more long-term. It’s important to consider the lawsuit loan terms and conditions of the refinancing agreement, especially since some disreputable lenders may disguise unfavorable terms. Consult with your attorney on the best option for you and how to choose a reputable lender.

Apply for Lawsuit Loan Refinancing with Fund Capital America

At Fund Capital America, we’re committed to providing our clients in California with the funding they need for personal injury cases. We’ll simplify and streamline the lawsuit loan or pre-settlement funding refinance process to ensure you have access to funds when you need them — contact us to learn more or apply online today.

Frequently Asked Questions

Is refinancing a lawsuit loan the same as refinancing a regular loan?

Refinancing pre-settlement loans vs. regular loans present several differences. Lawsuit loans generally require you to have an attorney and ongoing lawsuit, but they offer relatively fast and low-barrier approval. In comparison, refinancing personal loans requires more information regarding your credit score, income, and other details.

How much can I refinance my lawsuit loan for?

The total loan amount you can qualify for depends on factors related to your individual circumstances, such as the value of your case, your financial circumstances, and market conditions.

What are my legal funding assistance options?

Plaintiffs can access several forms of legal funding options and other assistance, such as: