Can you get a loan on a car accident settlement?
Car accidents are a common occurrence, and they can be extremely disruptive to your life. To add insult to injury, when it was the other driver’s fault it can take years for a settlement to be paid out to you. While you are waiting, you may not be able to work. If this happens, you may have to use your savings to get through this very difficult time. This could leave you at a financial disadvantage for years to come.
If there is any good news during this difficult time, it’s that there are options you can take to get funding to help cover your expenses until you’ve reached a settlement with the at-fault party’s insurer. A settlement loan may be the right solution for you.
Types of Funding Options
There are plenty of legal funding options you can get if you are involved in a car accident. These are much quicker and a whole lot simpler than waiting for a settlement. Auto accident funding companies make the loan available to you based on your current and future needs. You can visit this website to learn more about the different types of funding options.
Generally, plaintiffs use this money for a variety of necessities such as rent, car payments, and other living expenses. You may also need funds to cover the costs of your medical treatments. If you’re willing to lose some of your settlement to a lender after your settlement has concluded, a loan can provide you with the money you need to stay afloat.
One reason people choose settlement loans is unlike other loans, this loan doesn’t have to be repaid if you do not get a settlement. If you get a settlement, you will repay the loan plus interest out of your settlement check.
Types of Accidents
Most types of vehicle accidents will qualify you for accident loans. Typically, if you have an injury that was caused by negligence on part of the other driver, your loan will be pre-approved if the lender believes you are likely to win your case. Some of the types of accidents that may qualify are:
- Accidents involving pedestrians
- Accidents involving bikes
- Accidents involving Uber or Lyft
- Accidents involving commercial vehicles
In order to qualify for this type of cash advancement, you have to be over the age of 18. You will also have to work with an attorney with a contingency payment arrangement, and the claim against any insurance company or another insured must be valid and legal as well. Also, the amount of a settlement loan is predicated on the severity of any bodily injury and any damage incurred.
Pros and Cons of Auto Accident Loans
Before you consider applying for a settlement loan, consider the pros and cons.
One of the main benefits of getting a loan for an auto accident is that you can get the help you need right now. A secondary benefit is that often you can get a settlement from the insurance company that is higher than your original amount. People who take longer to settle are typically able to get better settlements.
The biggest con to an auto accident loan is that the interest on what you borrow can be extremely high if you do end up winning. Another mistake that people generally make is spending too much or borrowing more than they actually need. It can drive up the repayment significantly. Try your best to only take a loan for what is truly necessary.
Before you accept any loan you’ll need to talk it over with your attorney and get their approval. Your lawyer may also recommend lenders to you or tell you which lenders you should avoid.