Do I have to pay if I lose my case?<\/h4>
Most often, you won\u2019t repay your settlement loan if you don\u2019t win your case. It\u2019s what contributes to the high cost of settlement loans: They\u2019re highly risky for the lender.<\/p>
However, approval for a settlement loan isn\u2019t likely unless the company is convinced your case will win.<\/p><\/div><\/article>
5 tips to finding a legitimate settlement loan provider<\/h3>- Read customer reviews. <\/strong>They won\u2019t always give you the full scope of what your experience could be like, but reviews are a good place to spot red flags like hidden fees or unclear terms.<\/li>
- Look for accreditation.<\/strong> Trade industries set standards that protect both lenders and consumers. While it\u2019s not as effective as government regulation, businesses accredited with organizations like the Better Business Bureau (BBB) are theoretically held to some standards of business practices.<\/li>
- Ask about rates and fees.<\/strong> Try to avoid any company that\u2019s unwilling to discuss your potential rates and terms after learning about your case. If the company charges an application fee, ask if they\u2019re willing to waive it.<\/li>
- Get your lawyer involved.<\/strong> Your attorney may be able to guide you toward a legit lawsuit loan. Many lawyers have worked with settlement loan companies before, providing a better idea of providers on the up and up.<\/li>
- Watch out for conflicts of interest.<\/strong> Confirm that your lawyer doesn\u2019t have a financial relationship with any lender they recommend before agreeing to continue.<\/li><\/ol>
Alternatives to settlement loans<\/h3>
If you\u2019re still earning money or aren\u2019t totally dependent on the legal settlement, consider alternatives to expensive settlement loans:<\/p>
- Personal loans.<\/strong> Canadian law requires that the APR be displayed on loan agreements, and in most provinces, the highest APR a lender can charge is 60% \u2014 around where settlement loans start. Loan amounts can potentially run up to $50,000, though lenders vary in the amounts they will put out. Borrowers typically have from 1-5 years to pay it off.<\/li>
- Personal line of credit.<\/strong> Lines of credit are a solid option if you have ongoing expenses that aren\u2019t easy to predict. You get access to a credit limit to draw from whenever you need it, repaying what you borrow plus interest and fees. Rates are typically lower than a credit card.<\/li>
- Crowdfunding.<\/strong> If you have a sympathetic case and a healthy social media presence, a crowdfunding platform may be a way to raise funds for your legal defense, medical bills and more. Most platforms take a percentage of the money you raise as a fee.<\/li>
- Friends and family.<\/strong> It\u2019s not always easy to ask for help, but you may be surprised by how much the people close to you want to help. You can even use online services to find legally binding contract templates that make it easy to outline loan terms that you and your loved ones can agree on.<\/li><\/ul>
Riskier options include borrowing against your house with a home equity loan or drawing from your retirement savings with an RRSP loan. If you\u2019re not able to repay what you borrow, you could lose your home or savings.<\/p>\n
Alternatives to settlement loans<\/h3>
If you\u2019re still earning money or aren\u2019t totally dependent on the legal settlement, consider alternatives to expensive settlement loans:<\/p>
- Personal loans.<\/strong> Canadian law requires that the APR be displayed on loan agreements, and in most provinces, the highest APR a lender can charge is 60% \u2014 around where settlement loans start. Loan amounts can potentially run up to $50,000, though lenders vary in the amounts they will put out. Borrowers typically have from 1-5 years to pay it off.<\/li>
- Personal line of credit.<\/strong> Lines of credit are a solid option if you have ongoing expenses that aren\u2019t easy to predict. You get access to a credit limit to draw from whenever you need it, repaying what you borrow plus interest and fees. Rates are typically lower than a credit card.<\/li>
- Crowdfunding.<\/strong> If you have a sympathetic case and a healthy social media presence, a crowdfunding platform may be a way to raise funds for your legal defense, medical bills and more. Most platforms take a percentage of the money you raise as a fee.<\/li>
- Friends and family.<\/strong> It\u2019s not always easy to ask for help, but you may be surprised by how much the people close to you want to help. You can even use online services to find legally binding contract templates that make it easy to outline loan terms that you and your loved ones can agree on.<\/li><\/ul>
Riskier options include borrowing against your house with a home equity loan or drawing from your retirement savings with an RRSP loan. If you\u2019re not able to repay what you borrow, you could lose your home or savings.<\/p>
\n - Personal line of credit.<\/strong> Lines of credit are a solid option if you have ongoing expenses that aren\u2019t easy to predict. You get access to a credit limit to draw from whenever you need it, repaying what you borrow plus interest and fees. Rates are typically lower than a credit card.<\/li>