How Pre-Settlement Funding Gets Paid Back
You’ve gotten funding for pending personal injury lawsuit settlement, now it’s time for your pre-settlement funding payback. Find out more.
Less than a minute to apply – get the cash you need in hours if approved.
Pre-Settlement Funding Payback: An Overview
If you have reached the point where it’s time to pay back the pre-settlement funding you’ve received, congratulations! This means that you’ve successfully received a settlement for a personal injury case. Now you can move on with your life. Getting pre-settlement funding helped you to make ends meet while your settlement was reached, but now it is time to work with your funder to pay them back. When it comes to pre-settlement funding payback, there are a variety of scenarios that can take place. Be sure to check with your specific funder to see what they require. Here, we focus on what the most common pre-settlement funding payback situations look like.
To begin, it’s important to note that with Fast Cash Legal, you will ONLY pay back your funding if you win your settlement. If you don’t win, you keep the money from us. Generally, there are three main types of payback scenarios. The first one is compounding interest rate with fees, the second one is compounding interest, and the third one is simple interest. Which one is best for you?
Compound Interest with Fees
This scenario will be the most costly to the person who gets the funding. This is because there are two different types of costs that the funder is charging. The first one is the compound interest and the second one is the fees. Compound interest is when you are responsible for paying interest on top of the interest that you owe. For example, if you were funded $5,000 and the interest rate was 5% each month, you would owe an additional $250 at the beginning of month one. In month two, your total funding balance would be $5,250 (original amount plus interest). You would then pay the 5% interest rate on this amount, which would be $262.50. This pattern would continue until you begin to pay down the funding that you owe.
And, in the scenario of compound interest with fees, you will also be charged a fee for accepting the money from the funding company. Fees can vary greatly depending on which company you work with, so it’s important for them to be upfront about what fees, they charge when you decide to work with them. As you can see, in this scenario, the amount that you will owe back can start to build up very quickly. It’s best to choose this option if you have no other choice. Or, choose this option if you know you can pay back the money very quickly to avoid months of compounding interest.
Compound Interest
This compound interest scenario is very similar to the one above, with the exception of being able to avoid fees associated with the funding amount. However, it is important to always check to see what the interest rate is. This is where you will need a calculator and some math skills! Surprisingly, avoiding fees may not actually be the best scenario in the long run when it comes to compound interest. All of these situations depend on your exact need, so it is difficult to estimate, but let’s take the following as an example.
If there is a funder who is offering a 3% compounding interest rate with a $500 fee vs. a funder who is offering a 4.5% compounding interest rate with $0 fee, you may be tempted to take the $0 fee offer. You will need to do the math for what you plan to borrow to see if paying the fee is worth it to get the lower interest rate. This is why companies that offer compounding interest can be a hassle to work with. The money you owe back can really start to add up.
Simple Interest
If all of this sounds daunting, don’t worry. There is a third option that has a much more straightforward payback option. It’s called simple interest. This is the best type of interest for the individual who takes the funding because it doesn’t compound. And, this is the type of interest rate that Fast Cash Legal offers. Simple interest does not compound, so your funding accrues the same, flat interest rate while you pay it back. For example, if your funding was for $5,000 and the interest rate is 5% each month, you would be paying $250 a month in interest on the full $5,000 amount. In other words, if it took you six months to reach your settlement, you would pay $1,500 to the funder on top of the $5,000 funding that you received.
If you have not yet gotten pre-settlement funding, we highly recommend that you find a funder who offers these payback terms. Choosing this situation can save you thousands of dollars in the long run.
Getting Started
As you can see, pre-settlement funding payback options can be confusing. If it seems overwhelming, don’t hesitate to reach out to a pre-settlement funding company to find out what they offer. At Fast Cash Legal, we are available around the clock to help clients learn more about what working with us looks like. Contact Us today to learn more.
And remember that you need not worry about how you’re going to pay us back if you end up losing your case… if that happens you will not have to pay us back. Not a single cent.
Call us today to apply at (844) 213-1116, or simply start by completing the short application!
How Do I Qualify?
While there are many things that we look at regarding your personal injury lawsuit to see if you qualify for a legal funding, there are 3 main questions we ask about your case:
- How serious were the injuries you suffered?
- Does the person who caused the accident have a way to pay for any legal settlement award?
(the real key is do they have insurance to pay for it) - Is the person who you’re claiming caused the accident actually responsible for the accident?
(kind of an odd question, we understand, but you’d be surprised)
If your case can meet these qualifications, then there is a great chance we can fund you.
Fast Cash Legal does not provide pre-settlement legal funding in the following States: Alabama, Arkansas, Colorado, District of Columbia, Illinois, Indiana, Kansas, Maine, Maryland, Missouri, Nebraska, Nevada, North Carolina, Oklahoma, South Carolina, Tennessee, Vermont, Virginia, West Virginia.
Fast Cash Legal does NOT fund Workers Compensation cases.
Start Your Free Application Now
- No credit checks
- If approved, you can get your cash in 24 hours
- If you lose your case, you owe nothing
- There is no obligation if you apply then decide not to take the funding
