What Is a Settlement Loan? A Comprehensive Guide to Understanding the Concept

In times of financial hardship or unexpected expenses during a personal injury, a settlement loan can provide a quick and effective solution for those awaiting compensation. But, what exactly is a settlement loan and how does it work? In this article, we will discuss the ins and outs of this type of loan and how it can help you in a financial emergency during your dispute.

What is a Settlement Loan?

A settlement loan, also known as pre-settlement funding or a lawsuit loan, is a type of non-recourse loan that is offered to personal injury plaintiffs who have filed a legal case and are waiting for the settlement or compensation from it. This loan is provided to help injured people pay their bills and emergency expenses, where there is no repayment unless the dispute is settled and won.

Types of Settlement Loans

There are several types of settlement loans, each with its own unique features and benefits. Some of the most common types include:

  1. Pre-settlement lawsuit funding: before a case settles.
  2. Post-settlement funding: after a case settles and before the money is disbursed.
  3. Structured settlement funding: after a case is settled and the settlement money has been disbursed as a structured settlement payment.
  4. Worker compensation settlement loans: Financing for workers comps claims.

The Pre-Settlement Loan Process

The process of obtaining a settlement loan is relatively simple. First, the plaintiff seeking an advance from their claim must have a case with merits and they must be expecting to receive a settlement or compensation from it. Once the plaintiff has met this requirement, they can apply for the settlement loan. The funding provider will then assess the case and determine the loan eligibility. Furthermore, the attorney in charge of the case has to be present during this process.

If the case is eligible for funding, the company will then offer a funding amount based on the potential settlement or jury verdict from the legal case. This funding amount will be in a contract that the plaintiff and their attorney have to sign before the money is released. The funds can be used to cover all necessary costs such as rent, mortgage, electricity bills, medical expenses and more while they wait for the defendant to offer a proper settlement offer.

Key Benefits of a Settlement Loan

There are several advantages to taking out a settlement loan, including:

  1. Quick and easy access to funds.
  2. No credit checks.
  3. No collateral required.
  4. Ability to pay bills and other expenses in due time.


In conclusion, a settlement loan is a type of funding for a lawsuit that provides fast access to funds for injured people who have filed a lawsuit. It offers several benefits, including no credit checks or collateral requirements, and can help injured people cover their expenses when all other types of financing are not available for them.

Anyone with a financial emergency and a case where the defendant is clearly responsible for the accident can apply for a settlement loan and receive the needed financial support.


Who is eligible for a settlement loan?

Personal injury claimants who have filed a lawsuit and have an attorney representing them are eligible for advanced funds.

How much money can I get from a settlement loan company?

The amount of money you can get from a settlement loan company is based on the potential value of the legal settlement. It typically goes up to 10% of that value.

Do I need collateral to get a settlement loan?

No, you do not need collateral to get a settlement loan.

How long does it take to get a settlement loan?

The process of obtaining a settlement loan is relatively faster than banks loans and it is available within a few days of applying.