Loans, on the other hand, operate much differently. These need to be repaid regardless of the outcome of the case. Often, a lender will attempt to buy a portion of the proceeds from a lawsuit with interest, which could end up costing you later on.
The benefits of cash advances for a pending settlement
As mentioned earlier, cash advances are ideal solutions for people who need money to get them through the duration of a lawsuit. For example, if the lawsuit involves a person who was injured and unable to work, a cash advance could provide a cushion for the duration of the litigation. Our clients use cash advances for everything from medical bills and mortgage payments to car notes and general living expenses.
Another key benefit of these advances is that it often gives clients more time to work with their attorneys to consider settlement offers. This is particularly true for long and exhaustive litigation. We find that our clients often use cash advances to simply pay their legal bills.
Not all cash advances are created equal
While funding can be helpful for short-term expenses, some cash advances can also take a substantial cut of settlement money. As with any form of funding, clients pay back the principal with interest. In some cases, clients may end up paying more for the cash advance than the amount they received. There are different ways to handle this – at Glofin, we don’t offer quite as much up front as some other companies, but that means that if and when the lawsuit is settled, you’ll receive a bigger proportion of it.
For example, we only require our clients to pay a 2.99 percent fee and a 20 percent Minimum Return Fee. The monthly fee is structured so that clients are only charged up to the point they reach settlements or judgments. Other companies offer different structures with set terms where clients are required to pay for up to 12 months, even if their settlement was reached well before that time. This fee schedule can often cause clients to pay more than their loan amounts, which won’t happen with Glofin advances.
While these fees are standard among most financing companies, it is important that clients understand the costs associated with cash advances, and do the research about the right product for their needs.
Clients may not qualify
Like any financing company, Glofin has a specific list of lawsuits it covers. If your lawsuit isn’t on the list, we’re still able to look at it and see if it’s possible to do business. Unlike most of those companies though, while we evaluate clients based on their levels of financial risks, we only do so to create a payment schedule. Auditing consumers for financial risk is a common practice among lenders and can often make it difficult for people to find a company to finance them – particularly a reputable company.
In this industry, there are many predatory lenders that can be especially costly for consumers. That is where Glofin can help. We sit down with you on a one-to-one basis to evaluate your options and determine if a cash advance for a pending lawsuit is in your best interest.