Should I Look Into Settlement Loans?

There can be financial strain from medical bills, lost wages, and other expenses following a Maryland auto collision. In these situations, some injured individuals consider settlement loans, which are also known as lawsuit loans, pre-settlement funding, or legal financing. They do so because they are looking for a way to cover costs while waiting for their case to resolve.

But while settlement loans may seem like a good idea when you are overwhelmed by accident expenses, their high costs often make them a risky choice. By working with a Baltimore personal injury lawyer, it could be possible to navigate financial challenges without resorting to high-interest loans.

Weigh the Risks Before Agreeing to a Settlement Loan

Cash advances offered to individuals involved in personal injury cases, settlement loans allow you to borrow against the expected settlement. Then, the lender is repaid from your eventual compensation. While this may sound appealing, these loans come with high interest rates, which can quickly eat into your settlement. The long-term costs of lawsuit loans typically outweigh those of these high-interest options.

In rare cases, settlement loans might be a reasonable option, such as when essential expenses like rent, utilities, or medical bills cannot be deferred. Some also choose to access these types of loans because other financial options, like personal savings or borrowing from family, are unavailable. Yet even in these scenarios, it’s crucial to carefully weigh the risks and explore alternatives before committing to high-interest legal funding.

Why Avoiding Settlement Loans Is Often Best

The high interest rates and fees associated with settlement loans can leave you with little to no compensation once your case is ultimately resolved. For example, if your settlement is delayed for a year, a $10,000 loan with a 40% interest rate could grow to $14,000 or more, significantly reducing your final recovery.

Instead of relying on settlement loans, consider these alternatives.

• Speak with an attorney about managing medical bills or negotiating payment plans.
• Utilize insurance coverage to offset immediate expenses.
• Explore low-interest options, which are typically more affordable.

Additionally, a common misconception is that you need upfront funds to hire an attorney. Most personal injury attorneys typically work on a contingency fee basis. This means they only get paid if they win your case, and their fee is taken as a percentage of the settlement or court award.

It’s important to remember that speaking with an experienced Baltimore personal injury lawyer won’t add to your financial burden. Attorneys may be able to improve your financial situation. This is because legal professionals can share with you strategies for negotiating with medical providers and creditors. Then, you could ease immediate financial pressures while your case is pending.

Were you offered legal financing? Have a conversation with the legal team at Iamele & Iamele, LLP. Attorneys are available to advocate for your best interests, ensuring you receive fair compensation without unnecessary debt. Before considering a settlement loan, consult with a lawyer to explore better options for financial relief. Contact us to book your confidential appointment.