While personal loans may seem like a quicker financial fix, legal funding offers a more flexible, lower-risk solution for plaintiffs navigating a lengthy lawsuit. With no repayment required unless you win, no credit checks, and faster access to funds, legal funding provides significant advantages over traditional loans.
By choosing legal funding, you can focus on your case and make informed decisions without the added stress of ongoing debt, interest, or loan repayments. Below are some of the top reasons to consider legal funding over traditional personal loans.
No Repayment Unless You Win
One of the most significant advantages of legal funding is that repayment is contingent on the outcome of your lawsuit. If you win your case or reach a settlement, you repay the funding provider from your award. However, if your case is unsuccessful, you owe nothing.
This is a stark contrast to personal loans, which require monthly payments and must be repaid with interest regardless of the lawsuit’s outcome. With a personal loan, if you don’t win your case, you could still be burdened with debt, making legal funding a safer financial option during litigation.
No Credit Check/Collateral Required
Another major difference between legal funding and personal loans is that legal funding companies do not typically perform a credit check or require collateral. This makes it accessible to individuals who may have poor credit histories or lack assets to offer as security.
In contrast, securing a personal loan often requires a strong credit score and/or collateral, such as a car or home, which not all plaintiffs can provide. This barrier can prevent individuals from obtaining the financial support they need to pursue their case. Legal funding focuses solely on the merits of your lawsuit rather than your creditworthiness or financial standing, offering a more inclusive option for plaintiffs.
Fast Access to Funds
Legal funding is typically faster to access than personal loans. Once your case is evaluated, which usually takes only a few days, you can receive the funds within a short period—sometimes within 24-48 hours.
Personal loans, on the other hand, can take much longer to process, especially if the borrower needs to undergo a lengthy application process, provide additional documentation, or deal with credit checks. In urgent legal situations, where plaintiffs need money quickly for medical bills, living expenses, or court fees, legal funding provides a more efficient and timely solution.
No Risk of Debt Accumulation
Personal loans come with interest rates that can add up over time, making it difficult for borrowers to repay the loan without incurring additional financial strain. These loans can also negatively impact your credit score if payments are missed or delayed.
Legal funding, however, does not involve interest or monthly payments, and the repayment is tied solely to the outcome of the case. If you lose, you do not owe any money. This structure eliminates the risk of accumulating additional debt and protects your credit rating, which can be a concern with traditional loans.
Allows You to Wait for a Fair Settlement
A lawsuit can take months or even years to resolve, and plaintiffs often feel pressured to settle early due to financial strain. With personal loans, you may feel the need to accept an unfavorable settlement to cover loan payments or living expenses.
Legal funding allows you to hold out for the best possible settlement or judgment because you don’t have to worry about how to cover your bills in the meantime. This flexibility enables you to make strategic decisions in your case without the financial pressure of repaying a personal loan.
No Impact on Your Case
Taking out a personal loan can sometimes complicate your case. Loan providers may require that they be repaid from your settlement, which could create conflicts or reduce the amount you ultimately receive.
Legal funding, however, is typically non-recourse, meaning the lender only receives repayment if you win or settle your case. There’s no interference with your legal strategy or claims because the funds are provided solely to support you during the litigation process.
Legal Funding From Cash Now Funding Group
Are you or a family member in need of financial assistance due to a lengthy legal battle? Are you preparing for a long-term legal battle to get the compensation you deserve? Cash Now Funding Group can be the financial lifeline you need while your case settles. Applying is free and confidential & no credit check is required.
