Thursday, June 7, 2012

Where to Find Loans for Lawsuit Costs and Expenses

You can locate loans for a lawsuit through traditional or alternative lending sources. If you are using a traditional lender, like a bank, you will typically be seeking a more traditional loan. Alternative lenders, like independent finance companies, are more likely to issue the unique "lawsuit loans" that can be popular in this situation. Each lending source will offer unique advantages over the other.
Traditional Lenders
  • Traditional lenders include banks and other institutions that subject themselves to financial regulation. As a general rule, traditional lenders are insured by the FDIC.
  • Traditional lenders require stricter credit standards. They are less likely to lend to a borrower with a murky financial past.
  • These lenders, with very few exceptions, will not use the anticipated settlement you will receive from a lawsuit as collateral on a lawsuit loan. Instead, you will be more successful using your home equity, auto title or other source of collateral when seeking a traditional loan.
  • Though the loans are hard to get, they tend to have more favorable terms to the borrower. For example, rates from these loans may be lower than those from high risk lenders. These lenders are also more likely to be flexible with loan terms, giving you more options down the line.
Alternative Lenders
  • Alternative lenders are usually independent financiers or finance companies. They are not typically insured by the FDIC, and they may practice some lending behaviors that would disqualify them from approval from major federal associations such as the Federal Housing Administration.
  • Alternative lenders cater to the high risk market. They are less concerned with your financial past because it presents them with the opportunity to enter a captive market. This means that these lenders know you have few options for a loan based on your credit standards, so they can present a loan option that provides them with a large profit.
  • Alternative lenders are more likely to use the anticipated settlement of your lawsuit as a source of financing. However, these lenders will not use just any lawsuit. You have to have a fair chance of recovery. Lawsuit loans are often written to include language that would excuse you from repayment of the debt if you do not recover. Since this presents a risk to the lender, the lender will want to keep the risk very low. Only certain cases will be acceptable. This includes family law settlements, employment practices settlements and liability settlements. Other cases may be considered, but the unique circumstances of the case must present a high chance of recovery.
  • These loans are not as difficult to secure as traditional loans. In exchange, though, the lenders issue far less favorable terms. The loans tend to be highly costly, charging high interest rates and financing fees. You may even see high up front costs with these debts. Beyond the cost, these loans are far more rigid. If something were to compromise your ability to repay the debt on time in the future, you may have less options to refinance or otherwise modify the loan contract.



Ref : www.loan.com
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