Before you evening consider taking out a personal injury loan, you should speak with an experienced attorney about your case.
The journey toward recovery can be long and arduous for car accident victims. With medical bills piling up, some people may struggle to make ends meet. Relying on a settlement isn’t really an option, since the proceedings can take months to end. And, that’s if there aren’t any disputes.
So, if you are in this situation, you may be considering taking a personal injury loan to get some additional funds now. However, before you do, you should understand exactly what they are and what they mean.
What Are These Loans?
A personal injury loan isn’t a loan in the traditional sense. They act more as legal advances before your settlement money comes in – usually. You don’t have to pay any back payment until your case (insurance dispute or trial) is settled.
Some companies that offer these loans also specifically mention that, if you don’t get any settlement money, then you don’t have to pay back the amount you borrowed. So if you go this route, make sure the company who will lend you the money has this rule. Otherwise, you will have to pay them back out of your pocket if you lose the settlement.
However, things aren’t much better if you win. If you are given settlement money, then you have to start paying back the loan company. Because of interests rates, the final sum you give back can be a lot bigger than the one you took.
Understanding Interest Rates
These loans often carry huge compound interest rates. Your loan gathers interest during your settlement proceedings and the time you don’t pay the money back. That will be added to the loan amount once you start paying the money back.
The charges can be pretty high. As mentioned previously, these cases can take a long time to settle, and if the in meantime you’re also accumulating interest on a loan, it can mean an even bigger financial strain than the one you started with. The loans often have no specific timeframe, and can essentially just wait around for you. In the end, even if you get enough compensation for your injuries, you may have to pay a good chunk of that sum back to the legal funding company that gave you the loan.
What Should You Do?
There is no question that these personal injury loans can offer some peace of mind to victims of car accidents surrounded by bills to pay. However, you should think carefully before you take on such a loan.
Speak With an Attorney First!
If you haven’t already, it is important to speak with an experienced St. Louis car accident attorney as soon as possible to ensure your legal rights are protected.
If you have an attorney working on your case, get in touch with them to see how your case is going, what’s the ballpark of a potential settlement, and how likely it is that you’ll get the settlement. Ask for their opinion regarding these loans, or other financial funding available to you. Give us a call 24/7 at (314) 361-4242.