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FinancesFinancial Planning

How Many Presettlement Loans Can I Get? Your Complete Guide

The presettlement funding industry is a massive one in the United States with a valuation of approximately $717 million. If you’re in the middle of a legal case and are strapped for cash, you might be thinking about applying for a presettlement loan to help tide you over until you receive your settlement.

Before you pull the trigger on this type of loan, though, it’s important to have a clear understanding of what you’re getting into. Read on to learn more about presettlement loans and have all your most pressing questions answered.

What Are Presettlement Loans?

A presettlement loan is a type of loan available to those who are in the middle of a legal case. They’re typically offered to those who are in the middle of personal injury cases, such as car accident cases, and cannot work and have lots of bills to cover.

How do pre settlement loans work? When you take out a presettlement loan, you basically get early access to the money that will eventually be yours when your case is settled.

These loans reduce your financial burden during a stressful period in your life. They also free your lawyer up to work on your case and maximize the potential value of your claim.

Since you’ll have money to tide you over, your lawyer won’t feel pressured to agree to a lower settlement just to wrap things up. As a result, there’s a possibility that they can secure you a better payout.

Pros and Cons of Pre Settlement Loans

At this point, a presettlement loan might seem like a pretty great option. You might also be wondering, though, “What is wrong with pre settlement loans?”

As with any type of loan, there are pros and cons to borrowing against your future settlement. Here are some of the most noteworthy benefits and drawbacks you ought to keep in mind before deciding to apply for a presettlement loan:


Presettlement loans can significantly reduce the financial strain you experience while going through a difficult legal case. You can use the money from the loan to cover bills, pay for medical expenses, or just take care of everyday needs like the cost of groceries and gas.

If you’re unable to work, a presettlement loan is especially beneficial. It provides you with a source of income and ensures that you can meet your basic needs while you hold out for a larger settlement.

Most presettlement loans are non-recourse loans, too, which means you don’t have to pay them back if you lose your case. This type of loan is also less expensive than a bank loan (lower interest rates and fees). It doesn’t require a credit check, either.


Even though presettlement loans are less expensive than traditional loans, it’s important to note that there are still some fees attached to them. Some people aren’t made aware of these fees in the beginning and then are upset when they find out about them later.

Keep in mind that these types of loans don’t provide you with a huge lump sum. In most cases, they’re only worth about 15-20 percent of the estimated settlement value.

Don’t forget, too, that you can’t apply for a presettlement loan unless you have a lawyer representing you. Your lawyer will need to help you with the application process before you can access the money that’s available.

How Many Pre Settlement Loans Can I get?

If you want, you can apply for more than one presettlement loan. It’s important to note, though, that the total amount of the loan cannot exceed 20 percent of the value of the lawsuit (this includes any previous payouts you’ve received).

The limit on the amount you can borrow is put in place to protect you and the lending company. Remember, presettlement loans are often non-recourse loans. If the lender let you borrow the full amount of the settlement and you lost your case, they’d be out a ton of money.

How to Apply for Pre Settlement Loans

The process of applying for presettlement funding is pretty simple. Here are some of the steps you’ll need to go through to access the money available to you:

  • Contact a reputable presettlement loan company
  • Talk to a representative about your case
  • After reviewing your case, the representative will provide you with an assessment of the case and an estimate for your settlement, as well as a proposal of what they can lend you
  • Review the proposed agreement with your lawyer to decide if it’s a good option
  • Pay attention to the interest rates and fees that come with the loan
  • Agree to the proposed loan or send it back with a counteroffer

One of the most important things to consider when you’re planning on taking out a presettlement loan is the reputation of the loan company. The following tips can help you ensure you’re working with a trustworthy lender:

  • Ask about their rates and fees
  • Find out whether they offer non-recourse funding
  • Ask if they’re a broker or direct funder (a broker is a middleman that’s likely not as concerned with getting you a good rate, so finding a direct funder can be a better option)
  • Read reviews from past customers
  • Check with the Better Business Bureau to see if they have any complaints against them

As you can see, there’s a lot more to ask than just “how much do they charge for pre settlement loans for auto accidents?” Keep all of these factors in mind so you can find the best lender for you.

Is Presettlement Funding Right for You?

Now that you know more about presettlement loans, are you still interested in applying for one? If you want to move forward with this type of loan, be sure to follow the steps outlined above. They’ll help you to find a reputable lender and find a loan that works for you and your specific situation.

Are you interested in learning more about the best way to handle other legal situations? We have plenty of legal articles on our site that you might find helpful. Start by checking out this one on protecting a business with a prenup today.