Being involved in a vehicle accident is not only physically painful and emotionally draining but it can bring an unexpected financial burden too. The cost of unexpected medical bills, car repairs and even temporary car hire are all outgoing costs that you simply weren’t prepared for and you’re probably resenting having to pay out for something that wasn’t even your fault!
You may be familiar with something called an accident loan, but are unsure of the consequences of taking out a loan? Fear not — we’ve got some options available to you to have immediate financial help after having a car accident.
Our team of experienced lawyers handles cases just like yours every year that often rely on that initial financial support to help clients so we often find ourselves explaining what accident loans are and what they can offer.
We’ve got some insider experience with accident loans and want to share what we know so you can make your own decision about financing the short term additional costs of a crash.
What you need to know about taking out a pre-settlement loan
A pre-settlement loan is a sum of money borrowed by someone who is currently pursuing a personal injury claim. As you can imagine, the sudden unexpected costs that an accident causes are often met with panic. So, the idea of applying for a loan can seem like a quick fix before you receive compensation.
Like with most things, there are a few factors to consider before you hit ‘apply’ on that seemingly no-strings loan offer;
- Accident loans typically have much higher interest rates associated with them, and many companies offering high payout loans have really stringent contractual agreements. Make sure to read the small print before committing to anything
Lenders will consider how likely your case is to actually win when it reaches court, before deciding whether or not to lend you a loan. There’s always a risk that a plaintiff’s case might fail, and pre-settlement funding companies can be particular
This also means the loan companies will have higher fees and payback arrangements so make sure you’re completely aware of their payback rates before taking out the loan
The great news is, lenders can’t come after your personal assets if you fail to make payments, and that may leave the lenders with empty pockets if your case unexpectedly falls apart. This does mean their high-interest rates and fees are justified in the face of risky and potentially unrecoverable loans.
Go on recommendations- if you know someone who has used an accident loan lender before, ask them for the lowdown before deciding on whether you need to take one out
We’d always recommend writing a pros and cons list before committing to any kind of loan, is there any other way to help finance your outgoings in the aftermath of an accident that will avoid getting into debt through no fault of your own.
If you’ve considered applying for an accident loan or want to understand your legal rights surrounding these loans, get in touch with our dedicated team today on (480) 634-7480 to discuss any aspect of a personal injury or auto accident claim.