What You Should Know About Obtaining Lawsuit Loans in Texas
Many people overlook the financial stress of filing a personal injury lawsuit. Keeping up with utility bills, medical expenses, and mortgage payments is incredibly difficult when you’re paying hundreds of dollars to get the best possible compensation.
This is where lawsuit loans come in. These are cash advances given to plaintiffs who are waiting for pending lawsuit settlements or judgments. Before you reach out to a lawsuit loan provider in Texas, make sure you have a clear understanding of the process. Here are five things you should know about obtaining lawsuit loans:
1.They Are Different From Traditional Loans
First things first, make sure you understand that a lawsuit loan is very different from a traditional personal loan. Lawsuit funding is technically an advance on a potential settlement.
Unlike a traditional loan, which is paid in installments, lawsuit loans Texas are non-recourse. In simple terms, you pay only if you win the case or settle. Moreover, you don’t need to make monthly payments while the case is pending.
Some traditional loans also require collateral, such as your house for a mortgage. In comparison, lawsuit loans don’t require collateral. If you lose the case, you are not obligated to pay.
1.Not Everyone Is Eligible for a Lawsuit Loan
Getting injured due to someone else’s negligence doesn’t automatically make you eligible for a lawsuit loan. A lawsuit loan company will acquire the following information when assessing your eligibility:
- Type of accident. Personal injury cases like workers’ compensation and negligence, slip-and-fall accidents, premises negligence, and auto accidents are usually eligible.
- Description of your injuries. Loan providers will assess your medical bills to determine your case’s strength.
- Information about the defendant’s insurance company.
Other eligibility requirements include:
- You should be 18 years or older.
- You should have hired a personal injury lawyer.
- You should have a strong case against the responsible party.
1.Acquiring a Lawsuit Loan Incurs Costs
The cost of obtaining a lawsuit loan depends on your state and the provider’s policies. In Texas, a certain interest rate is applied to the borrowed amount once your application is approved. Always, always review the lender’s repayment terms. Make sure they don’t incur heavy or hidden fees.
Pro tip? If a lender compounds interest monthly or weekly, take your business elsewhere. Many providers hide this behind terms like “service charges.” The result? Your balance explodes long before your case settles.
1.There Are No Restrictions on Use
Once you receive lawsuit funds, you can use them for any purpose. Examples include:
- Medical bills
- Utility bills
- Rent
- Groceries
- Children’s education
- Transportation
- Personal injury lawsuit paperwork
1.You Do Not Need a Credit Check
A reliable lawsuit loan like USClaims won’t run a credit check or ask to see any financial documents. But they do require you to have an attorney working on your case to process your application.
Unlike traditional loans, your repayment is not based on your credit history and overall financial situation. Lawsuit loans are non-recourse, which means you will be funded based on the likelihood of a successful settlement.
