When you’re involved in a personal injury lawsuit and bills start piling up, pre-settlement funding (often called “lawsuit loans” in states like South Carolina, Colorado, and Missouri) might seem like a lifeline. Unlike traditional bank loans for lawsuits, this type of funding gives you access to a portion of your expected settlement while you wait for your case to resolve. It’s most commonly available for types of cases like car accidents, medical malpractice, slip and fall injuries, and workplace accidents.
But how does pre-settlement funding stack up against a typical bank loan? Let’s break down the key differences so you can decide which option makes the most sense for your situation.
Key Differences Between Traditional Bank Loans and Lawsuit Loans: What to Consider
You’ll find that in South Carolina, Colorado and Missouri, pre-settlement funding is provided in the form of a “lawsuit loan.” When comparing traditional bank loans to lawsuit loan in those states, it’s important to understand that they operate very differently, even though both are ways to get financial help. Here’s a breakdown of what you need to consider when weighing the two options:
- Determine Your Needs: For a traditional bank loan, you’ll need to think carefully about how much you want to borrow and the terms that fit your financial situation—like the loan amount, interest rate, and repayment period. With a lawsuit settlement loan (applicable in the states of CO, SC & MO), however, the amount you can borrow depends on the expected settlement of your case. It is imperative to first consult with your attorney on whether pre-settlement funding is right for you and your case.
- Check Your Credit Score: Traditional loans often require a good credit score, and it might be worth boosting your score before applying. Some pre-settlement funding companies, like Oasis, and other pre-settlement funding companies do check credit. But most don’t weigh credit history heavily since the loan is based on the potential outcome of your case, not your creditworthiness.
- Research the Company: Just like with a traditional loan, you’ll want to compare pre-settlement funding and lawsuit loan funding companies. Look for rates, fees, and customer reviews to find the right one for your needs. Oasis, for instance, is known for its great customer service and fast distribution of funds, making it a solid choice for those seeking pre-settlement funding.
- Prequalification: When applying for a bank loan, prequalification helps you get an idea of the amount and terms you might be eligible for. With pre-settlement funding, your prequalification is essentially part of a personal injury lawsuit—and the strength of your case is key.
- Gather Documentation: For traditional loans, lenders usually require a pile of documents—proof of income, tax returns, bank statements, etc. While pre-settlement funding doesn’t require nearly as much paperwork, you should still be prepared to provide any information that is pertinent to your case.
- Submit a Loan or Pre-Settlement Funding Application: Bank loans tend to have more complex applications, requiring detailed personal and financial information. On the other hand, applying for pre-settlement funding is simpler and quicker, especially with companies like Oasis, where the process is designed to be easy and stress-free.
- Underwriting and Approval: Banks scrutinize your credit, income, and other factors through a detailed underwriting process, which can take time. Both lawsuit loans and pre-settlement funding, however, often skip the really deep financial dive, focusing instead on the merit of your case and how likely you are to win a settlement.
- Loan Offer and Acceptance: For traditional loans, you’ll receive a loan offer with specific terms—interest rates, repayment periods, and fees—which you’ll need to review carefully. With loans for lawsuit settlements, repayment terms are tied to your case’s outcome—once the settlement comes through, that’s when repayment happens. If your case takes longer than expected, you might even take out another loan or subsequent funding.
- Loan Disbursement: Once a bank loan is approved, the funds usually go to the entity you’re paying—whether it’s a car dealership, mortgage company, etc. Lawsuit loans and pre-settlement fundings, however, go straight to you, often on the same day, and you can use them however you need—covering living expenses, medical bills, or car repairs while you wait for your case to resolve.
- Repayment: With a traditional loan, you’ll need to start making monthly payments right away. With pre-settlement funding, repayment only happens when your settlement comes in, and the amount owed is taken directly from your payout, saving you the stress of making payments before your case resolves.
Oasis Financial: The Smart Choice for Your Pre-Settlement Funding Needs
As an industry leader with over 25 years of experience, Oasis Financial is committed to delivering compassionate and personalized customer service. When it comes to securing financial support during your lawsuit, we pride ourselves on a hassle-free application process and high approval rates. You can expect quick access to funds without the stress of navigating complex paperwork. Our team is dedicated to making the experience as smooth as possible, so you can focus on your case, not your finances.
Visit our FAQ page to learn more and feel free to contact us with any questions or concerns. If you’re ready to get the financial relief you need, start your application and take the next step toward securing your pre-settlement funding.
Oasis provides pre-settlement funding, also known as consumer litigation funding, to its customers through different products depending on their state of residence or cause of action. Many consumers will be provided pre-settlement funding in the form of a purchase agreement, which assigns a portion of the pending proceeds from their legal claim. Other consumers, such as those in SC and CO will be offered a funding in the form of a pre-settlement loan, sometimes referred to as a lawsuit loan. These transactions have important differences, therefore, consumers should carefully review and be aware of the type of transaction that is offered to them by any funding company.