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Even with an experienced attorney in your corner, personal injury cases can drag on for months or even years. You likely began your case because you needed the defendant to help you pay the bills resulting from your accident. While you wait on the court’s decision or a settlement offer from the defendant, those bills and many others have begun to pile up. You know that you will breathe a sigh of relief when the case is over and your money is on its way. However, even after you have been awarded compensation, payment can take time. Two common solutions are personal loans and pre-settlement funding. Although both will give you money immediately, there are some important differences to keep in mind.

What is Pre-Settlement Funding?

If you simply cannot make ends meet while you wait on a resolution in your case, pre-settlement funding is one option to help you stay on your feet. The company offering the funding will ask for details of your case, often including x-rays, medical records, or other proof of the injuries you are claiming in your suit. If the company determines that you are likely to win your case, they will extend an offer of funding. They do not consider credit scores in their determination.

The funding offer will come with an interest rate, but that rate is not regulated by law, so be certain to read the fine print carefully. There are typically fees included, as well. None of these costs or repayment of the funding is required until an award is made in your case, at which time the company will be paid out of that award.

Pre-Settlement Funding vs. Loans

Pre-settlement funding sounds very much like a loan, but the two options for receiving money prior to your case’s resolution are quite different.

The amount you pay back over time can vary greatly between your two options. In a traditional loan, you will be charged a set interest rate over the life of the loan as you make monthly payments. Pre-settlement funding, however, only requires a single payment of the amount advanced to you, plus interest, if you win your case. If you lose your case, you typically do not have to pay back the advance at all.

Although a single payment out of your case winnings, and no repayment if you lose, may seem tempting, proceed with caution. Pre-settlement funding agreements are notorious for extremely high interest rates and fees. The fact that pre-settlement funding is not considered a loan in Georgia means that these agreements are not bound by usury laws, meant to help protect consumers from excessive interest rates.

In short, pre-settlement funding is not a loan, so be certain to know the differences as you contemplate your options.

Contact Us Today to Discuss Your Options

Capital Financing can help you to review any pre-settlement funding or loan terms prior to agreeing to either form of funding. Be certain that you are fully aware of the cost of any option you consider for covering your bills as you wait on your personal injury compensation.