How to Compare Rates Between Legal Funding Companies
4 min read read
Published Apr 2, 2025
Apples to Oranges: Why It’s Hard to Compare
Shopping for legal funding is intentionally confusing. Company A might quote you "2.9% per month," while Company B quotes "35% per year." Company C might offer a "low fixed fee." How do you know which one is actually cheaper?
Funding companies often use different terminologies to obscure the true cost of their money. To find the best deal, you have to look past the marketing slogans and focus on the math used in the contract.
The "True Cost" Formula
To compare two offers, you need to standardize them. Ask both companies for the "Total Payoff Amount" at specific milestones (6 months, 12 months, and 18 months).
For example, if you borrow $1,000:
• Company A (Compound Interest): Might cost $1,425 after 12 months.
• Company B (Simple Interest): Might cost $1,360 after 12 months.
Even if Company A advertised a lower "monthly rate," the compounding effect made it more expensive. Always look at the final dollar amount, not the percentage.
Ask for the Payoff Schedule
The single best way to protect yourself is to ask for a Payoff Schedule before you sign. This is a table that lists exactly what you will owe at every month mark.
If a company refuses to send you this schedule or says, "We calculate that later," hang up. A reputable funder like World Legal Funding will always provide a clear, written breakdown of exactly how much you will owe at any given time, so you can make the best financial decision.
