What is Settlement Funding?

Settlement Funding, otherwise known as Pre-Settlement Funding, Littigation Funding,  Lawsuit Loans, Lawsuit Cash Advance, Litigation Advance Loan, or Lawsuit Advance Loan is a type of unsecured loan offered to plaintiffs at an interest rate that is usually way above market. This loan is a type of non-recourse advance provided by a funding company usually associated or referred by the plaintiff’s lawyer.

Pros of Pre-Settlement Funding:

  • Quick Approval
  • Quick Cash
  • No Credit Check
  • Non-Recourse meaning if your case loses you don’t have to pay it back
  • More time to negotiate a settlement
  • No Monthly Payments

Cons of Pre-Settlement Funding:

  • Very High interest rates
  • Lien against your case
  • Unregulated business
  • Must have lawyer representing you

Lawsuit Loan Rates & Fees:

  • Monthly, 2.9% or more per month
  • Quarterly, 15% or more per quarter
  • Loan Initiation Fee: $100 to $500
  • Loan Closing Fee: $50 to $300

Settlement Funding Quarterly Repayment Schedule:

 Advance Amount  0-6 mo. 6-12 mo. 12-18 mo. 18-24 mo. 24-30 mo.
 $                     1,000.00  $      1,150.00  $          1,322.50  $        1,520.88  $       1,749.01  $          2,011.36
 $                     2,000.00  $      2,300.00  $          2,645.00  $        3,041.75  $       3,498.01  $          4,022.71
 $                     5,000.00  $      5,750.00  $          6,612.50  $        7,604.38  $       8,745.03  $       10,056.79
 $                     7,500.00  $      8,625.00  $          9,918.75  $      11,406.56  $    13,117.55  $       15,085.18
 $                   10,000.00  $    11,500.00  $        13,225.00  $      15,208.75  $    17,490.06  $       20,113.57
 $                   25,000.00  $    28,750.00  $        33,062.50  $      38,021.88  $    43,725.16  $       50,283.93
 $                   50,000.00  $    57,500.00  $        66,125.00  $      76,043.75  $    87,450.31  $     100,567.86
 $                 100,000.00  $  115,000.00  $      132,250.00  $    152,087.50  $  174,900.63  $     201,135.72

Settlement Funding Monthly Repayment Schedule:

 Advance Amount  6 Months 12 Months 18 Months 24 Months 30 Months
 $                     1,000.00  $      1,193.36  $          1,424.10  $        1,699.46  $       2,028.06  $          2,420.20
 $                     2,000.00  $      2,386.71  $          2,848.20  $        3,398.92  $       4,056.13  $          4,840.41
 $                     5,000.00  $      5,966.78  $          7,120.50  $        8,497.30  $    10,140.31  $       12,101.01
 $                     7,500.00  $      8,950.18  $        10,680.76  $      12,745.95  $    15,210.47  $       18,151.52
 $                   10,000.00  $    11,933.57  $        14,241.01  $      16,994.60  $    20,280.63  $       24,202.03
 $                   25,000.00  $    29,833.92  $        35,602.52  $      42,486.51  $    50,701.57  $       60,505.07
 $                   50,000.00  $    59,667.85  $        71,205.03  $      84,973.02  $  101,403.14  $     121,010.14
 $                 100,000.00  $  119,335.69  $      142,410.07  $    169,946.04  $  202,806.28  $     242,020.27

Basically, if your case takes 2 years to settle, you will have twice the loan amount deducted from your settlement.

In comparison, a simple interest loan will cost a lot less, below is a comparison:

 Advance Amount   12 Months (Lawsuit Loan @2.9% Monthly)   12 Months (Traditional Loan 10.99 APR) 
 $                     5,000.00  $                                                                                            7,120.00  $                                                                  5,549.50
 $                   10,000.00  $                                                                                          14,241.00  $                                                                11,099.00