Can You Get a Settlement Loan With Bad Credit?
If you’re pursuing legal action in a personal injury case, it’s likely that receiving the funds from a settlement will take time. You might not, however, have time on your side if your injuries are serious enough to keep you out of work and unable to earn an income.
While there is an excellent chance of arriving at a settlement, you will still have financial obligations to meet in the near-term.
A friend suggested you look into applying for a settlement loan, but you have reservations because your credit isn’t the best. Unlike traditional loans, settlement loans don’t factor in an applicant’s credit history. Here’s why.
How Lenders Determine Your Eligibility
Unlike other loans, a settlement loan has nothing to do with how much money you earn or your credit status. Settlement loan lenders do, however, take into account the likelihood of being awarded an out-of-court or court-ordered settlement. When the lender reviews your circumstances and believes your case has a high probability of being settled in your favour, the chances of being approved and obtaining a loan are high.
Settlement loan lenders will also not express interest in collateral, such as your home, bank account balance or other assets. The focus is on the strength of your case, the probability of receiving a settlement in your favour, and the amount you’re likely to receive.
How is the Loan Repaid?
Another reason that your credit score isn’t important to the lender is that the loan balance plus applicable fees and charges are repaid from the actual settlement. It’s not a matter of you having to remember to remit a payment personally. Instead, the process is handled between the lender and whomever will oversee the disbursement of the money from that settlement. In most cases, the settlement funds are placed in the control of your legal counsel and all disbursements are made by your lawyer. All you have to do is decide how you will use the loan proceeds and focus your energy on recovery.
Choosing the Right Lender
Not all settlement loan lenders are the same. While they must remain in compliance with current laws, there are those who are more interested in creating revenue streams than helping their clients on the road to financial and physical wellbeing. When you are determining where to seek a loan, only work with a lender that approves an amount that doesn’t exceed the projected total of your settlement. CaseMark Financial provides loans with interest rates that actually depreciate over time.
If you’re among the roughly five million Canadians injured in 2016 to the point that usual activities were limited or curtailed altogether, legal action is the only logical answer. While your lawyer is working on your settlement, let him/her know you’re interested in seeking a settlement loan and have them work with you to help you obtain the funds you need to stay financially afloat in the meantime.
