Pre-Settlement Funding vs. Personal Loans: Which is Safer?
4 mins read
Published Apr 2, 2025
The Liability Trap
When you need money during a lawsuit, you might consider going to your local bank for a personal loan. While the interest rates might look lower at first glance, personal loans come with a massive downside: Personal Liability.
With a personal loan, the bank lends money to you. If you lose your job, face unexpected medical bills, or lose your lawsuit, the bank does not care. You are legally required to pay them back, often with interest that compounds daily. If you default, they can garnish your wages or seize your assets.
The Burden of Monthly Payments
Personal loans require immediate repayment. Usually, 30 days after you get the money, you have to start making monthly payments. If you are already out of work due to an injury, adding another monthly bill to your stack is the last thing you need.
Pre-settlement funding solves this. There are zero monthly payments. You do not pay a single cent out of your pocket while the case is ongoing. The payment happens only once—at the very end—and it comes directly from the settlement money, not your bank account.
The Safety Net: What If You Lose?
This is the ultimate safety difference. If you take out a $10,000 personal loan and lose your lawsuit, you are now in debt $10,000 plus interest with no settlement money to pay it off. That is a financial disaster.
If you take $10,000 in pre-settlement funding and lose your lawsuit, you keep the $10,000 and owe us nothing. We absorb the loss. For a plaintiff in a risky legal battle, pre-settlement funding is the only option that offers true peace of mind.
