Why a pre-settlement loan may be your best bet after a car crash
Accidents happen each and every day, whether at home, on the job, or somewhere in between – like the highways. In fact, last year, car crashes on the nation’s roads increased from 2014, according to the National Highway Traffic Safety Administration.
“1.7 million people were injured in car accidents last year.”
Though some of these collisions were fender benders, they’re often more serious than that, causing injuries that require hospitalization. In 2015, over 1.7 million individuals were hurt in crashes, up 4 percent from the previous year, based on NHTSA data.
Crashes cost a lot, too, sometimes reaching tens of thousands of dollars just in health care expenses alone. Of course, auto insurance can cover some of these, but the proceeds may not be enough, making the legal route a potential solution.
Here’s the problem, though: If and when there is a settlement, it may take significant time thanks to the court system’s backups. In fact, on average, it takes almost 300 days before legal claims reach the settlement phase.
With medical bills to pay, this can result in a bit of a predicament. That’s where a pre-settlement loan may come in handy.
Pre-settlement loan is a loan…only different
Before we get into some of the reasons why pre-settlement loans are worthwhile in a crash’s aftermath, it’s important to clarify a common point of confusion. The term “pre-settlement loan” is a bit of a misnomer. By definition, a loan is an amount that is borrowed, only to be eventually paid back in full and usually with interest.
A pre-settlement loan is built differently because there’s a contingency attached to it: the outcome of the case. In other words, if the court comes down with a decision on what the amount is owed to the plaintiff, the loan is paid back. However, the debt is forgiven in its entirety if the plaintiff wages a losing battle. This is why a pre-settlement loan is perhaps better described or thought of as a cash advance.
What pre-settlement loans help pay for
“Life goes on after an accident.”
Pre-settlement loans – or for our purposes cash advances – can really help car accident victims because life goes on in the aftermath of a crash. As an example, many people are so injured that it renders them unable to go into work or do some of the active things like they’re accustomed to. Upon exhausting sick days, this can leave them strapped for cash. Cash advances provide for this eventuality and pay for such things as rent, mortgages, grocery bills and of course the cost of treatment and/or hospital stays. In fact, nearly two-thirds of all auto accident loans use their funds to pay for costs like mortgages and rent.
As with all loans, there’s an approval process, which takes into account creditworthiness, gauging how reliable borrowers are at making their payments. Here’s the beauty of pre-settlement loans: No credit checks are necessary. Presuming the car accident is being adjudicated in court, this is essentially the only element that’s taken into consideration. This determines how much financial assistance is necessary based on the facts surrounding the case.
The same standard applies with Global Financial. We’re not only in the lending business, we’re in the “making right” business, providing our clients with the funding they need to resolve their sticky situations that require litigation to fix. Whether the suit is over wrongful death, personal injury and many other unique circumstances, we’ll sit down with you and arrive at a plan that’s best. And remember, if the settlement doesn’t end with you being paid, neither are we.