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.
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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?
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.
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.