December 30, 2009 by Dr. Tom Rhudy
We are frequently asked what the interest rates are on a lawsuit loan. Unfortunately, this question arises because the applicant’s are actually unfamiliar with the overall process.
Frankly, the advance you seek has no interest rate involved in any aspect. It is the inherent risk of obtaining a return of money advanced, after your lawsuit meanders through the litigation-maze, that determines the fee assessed on the money you obtain. The term “risk-fee” refers to the fee charged in funding your lawsuit loan. The risk-fee is contingent on the inherent risk in your lawsuit. The lower the risk, the lower the fee!
It is unfortunate that many plaintiffs allow these perceived interest rates to keep them from pursuing a lawsuit loan. In many instances, such funding would allow these plaintiffs to continue in the fight to obtain a fair and equitable settlement. In the absence of such funds, many plaintiffs are simply unable to continue in the litigation-process, and are forced to settle their claims at amounts that are significantly lower than their claims would merit.
Obviously, since a lawsuit loan is not, in reality, a loan, we are not dealing with non-recourse loans. Contrariwise, we’re looking at a non-recourse transaction. The reference to “non-recourse” loans is simply for ease of reference. It is in fact this aspect of obtaining a lawsuit loan that makes this funding extremely appealing!
The term “non-recourse” simply refers to the fact that, once the resource (e.g., money) is distributed, there can be no recovery of that resource from the party to whom/which the resource is distributed if certain conditions are satisfied. When discussing a lawsuit loan, the non-recourse provision prevents the party providing the funding from demanding a return of those funds if the plaintiff loses the underlying suit. If you don’t win your case and you have received an advance on that case, you have no obligation to repay those funds!
We provide all the needed information to someone looking to for a lawsuit loan during their pending lawsuit. Visit us today to educate yourself further on how to apply for lawsuit loans today!
