Explaining the benefits of pre-settlement loans may be difficult because a lot of people already have pre-conceived notions about this type of financing. So let’s just go ahead and look at one example to help you understand that these loan options aren’t so bad after all.
Mr. A. Collins was injured by a drunk driver while he was driving on the freeway one night in January of 2012. He had no health insurance, unfortunately but he did have a life savings amounting to $26,380 tucked away in the bank. But a month of hospitalization and 8 months of rehab cost him over $43,000 which means he still had to borrow money just to pay for everything.
Mr. Collins couldn’t find work months after his rehab and so he was in danger of losing his home, which was what he put up as collateral to get the money he needed to pay for his medical bills. He sued the defendant and was offered an out of court settlement of $50,000. Obviously, the litigant felt that was a low blow offer. Although he felt a lot of pressure because he had no money to pay his bills, he decided he could get the compensation he deserved if he went on with his lawsuit. What he did instead was to apply for one of those pre-settlement loans and received $70,000. Five months later, the jury awarded him $150,000. He paid back the lender $70,000 plus interest (about $6,000).
So, even though he paid a significant amount of money in interest charges, he’s still glad he chose this option otherwise he wouldn’t have gotten the $150k settlement.