Who to Talk to When Considering an Accident Loan
The financial strain of medical bills, lost income, and other unexpected expenses following a PA or NJ accident can be incredibly upsetting. In these moments, some people turn to accident loans. Sometimes referred to as lawsuit loans or pre-settlement funding, these loans sell a promise of quick financial relief.
But while these loans may seem like a fast fix, they also come with risks that should be carefully weighed. Before making a decision, it’s crucial to talk to the right people, especially an experienced Bucks County personal injury attorney, to determine if this funding option makes sense for you.
Reasonable Choices and Bad Ideas
An accident loan is a type of cash advance provided to individuals waiting for their personal injury case to settle. Unlike traditional loans, these loans are non-recourse, meaning you only repay the money if you win or settle your case. The funds are typically used to cover immediate needs like medical bills, rent, or other daily expenses.
While this might sound appealing, accident loans often come with extremely high interest rates, sometimes as much as 30-50% annually. If your case takes years to resolve, the amount you owe can grow significantly, leaving you with far less of your settlement than anticipated.
That said, there are situations where an accident loan could be a reasonable choice. For instance, if you’re facing eviction or need funds to cover urgent medical care that insurance won’t cover, it might provide the short-term relief you need. Yet because of the high cost of these loans, they should only be considered as a last resort.
The reality is that for many people, accident loans create more financial problems than they solve. The high interest rates can eat away at your settlement, leaving you with little to show after your case is resolved. Typically, there are better options to manage financial difficulties while your case is pending.
Talk with a Lawyer to Make an Informed Decision
Before taking out an accident loan, consult with a Bucks County personal injury attorney. Your lawyer can help you evaluate possible solutions and determine whether a loan is truly necessary. They can also guide you toward alternatives, such as working with healthcare providers who accept payment on a lien basis or negotiating payment plans for pressing bills.
Another important bit of information to consider when making a financial choice is that you don’t need to pay your injury lawyer out of pocket. It is common for injury attorneys to work on a contingency fee basis, meaning the legal payment comes from your settlement or verdict, not your bank account. This arrangement allows you to focus on your recovery without worrying about upfront legal costs.
Could you use guidance on how to access money after an injury? Accident loans are rarely the best solution. By talking to the legal team at Kevin L. Hand, P.C., you can avoid costly financial mistakes and focus on building a strong case for the compensation you deserve. Call 215-968-6602 for a confidential consultation.
