Frequently Asked Questions

• What are the drawbacks of settlement loans?
  Although litigation loans can offer short term financial stability if you’re facing hardships like a personal injury, the final settlement funds you recieve from a successful case could be significantly reduced by high interest costs and fees. These loans can have complex terms that can be hard to comprehend, and their eligibility requirements can make them hard to get.
• Can I get litigation funding for my class action case in Canada?
  In Canada, you are able to access funding for class action settlements. You generally need court approval to get funding for this type of lawsuit, so it is best to consult your attorney if this path benefits you and, if so, what the best settlement funding option is. 
• Can you get a pre settlement loan for more than $5,000?
  The amount clients can borrow usually depends on the case and the lender. While some lenders offer minimum amounts ranging from $500 to $1,000, there usually isn’t a strict maximum limit. Typically, the loan amount is based on a percentage of your claim’s estimated value plus the perceived associated risk of lending to you.
• Can my lawyer deny me from getting a pre settlement loan?
  To apply for a pre settlement loan, you typically need your lawyer’s involvement, as they provide your case details to the potential lender. Without their cooperation, your application could be denied. Note that lawyers might be against you applying for a litigation loan due to factors like high interest rates or financial risks, which could impact your chances of a fair settlement. Remember, your lawyer fights for a favourable legal settlement during the litigation process.
• What should I consider before getting a settlement loan?
  Settlement loans typically have high interest rates to offset the lender’s risks; this is because plaintiffs must repay the loan only if they win the case. Since many cases can take years to settle, the accumulated interest could reduce your final compensation by a lot, adding to your financial stress. Beyond interest rates, many lenders impose additional costs such as administrative, origination, application and offer fees. Additionally, the approval process can be long and challenging if your case lacks a strong success prospect.
• What’s the difference between settlement loans and other types of loans?
  Settlement loans have a narrower purpose than other types of loans, such as personal or home equity loans. Settlement loans are mostly intended for individuals waiting for legal settlements, like those deriving from pending injury claims; and repayment is only required if the claim is successful. Due to lenders taking on high risk, settlement loans typically have much higher interest rates than personal loans, for example. If you win your case, these high rates could substantially chop the compensation amount you get to keep, potentially introducing additional financial pressures and financial struggles. In contrast, personal loans offer broader flexibility and can be used for various purposes, including debt consolidation, home improvements, medical bills, or even paying for everyday expenses and legal fees – as an alternative to settlement loans.
• Can you get a settlement on a loan?
  Generally, you can settle outstanding debt by hiring a debt settlement company to represent you or you can directly negotiate with the lender yourself. The process usually involves offering a lump sum payment that’s lower than the total debt amount to have the debt forgiven. However, lenders aren’t obligated to accept given offers, and pursuing debt settlement can have serious negative repercussions on your credit score. If you’re considering contacting a debt settlement company, beware of possible hidden fees and unrealistic promises.
• Can I get a loan after settlement?
  It is possible to obtain a loan after settling debt. However, you’ll likely need to seek funding from lenders other than traditional big banks. Debt settlements can cause serious financial problems since they often decrease your credit score. If you settle a debt, you’ll likely encounter a difficult time obtaining a low interest rate when applying for a loan afterwards.