A settlement loan can be applied for by anyone that has a settlement case pending in court. There are two types of settlement loans: pre-settlement and post-settlement; the first is given to those who have a legal case that is in process and has not yet reached a verdict. A post-settlement loan is one in which the verdict has been reached but is under appeal. Either way, the settlement loan represents money that is loaned based upon the amount of the settlement that is projected to be granted to the plaintiff. In general, the amount of the loan will be ten percent of the projected payout.
The way the loan works is that an application is filled out, after which, it is reviewed by an attorney to determine the chances of a favorable monetary judgment and the amount that it will be. If the loan is approved, the applicant will receive the money. Once the court case is completed and an award has been granted to the plaintiff, the money will be paid back in full, plus additional fees for the loan. If, for some reason, no money was received by the plaintiff, then they do not have to pay back the loan. The risk is taken by the lender on the calculation that the money will awarded to the plaintiff. These loans are not provided with any requirements for collateral and as such, take the form of a cash advance.
Personal injury cases are the most common for settlement loan approval because most cases involving injury are well-documented and the lawsuits often concern the amount of money that the plaintiff should be awarded and not whether an award should be given at all. These suits include injuries from car accidents, in the workplace, or sustained on private property such as that of a business. There are many possibilities.
There are other types of cases that do not involve an injury that may also qualify for a loan, and an individual can inquire as to whether their case is eligible for a cash advance. Depending on the likelihood of payment, there are many cases that might qualify for a settlement loan and applying is the only way to tell.