Many accident victims in Nevada wait months or more before getting a settlement from the at-fault party's insurance company. In these situations, victims may consider taking out a "pre-settlement loan" to help cover their bills that are piling up in the meantime.
In short, pre-settlement loans are cash advances against the victim's future lawsuit settlement. Note that people seeking pre-settlement loans are encouraged to borrow only from businesses fully licensed by the Nevada Department of Business and Industry Division of Financial Institutions.
Eligibility for pre-settlement loans in Nevada
Every loan company is different, but in general anyone is qualified for a pre-settlement loan who:
- has a personal injury claim, and
- has hired an attorney
Some pre-settlement loan companies limit their clientele to victims in Nevada car accident lawsuits. Others are more general, extending loans to victims of all types of accidents, such as:
- slip and falls,
- dog bites, or
- work injuries
Many loan companies do not require credit checks, employment verification, or even social security numbers. Loan companies may consult with the applicant's personal injury attorneys to obtain relevant documents. If everything goes smoothly, the applicant can receive cash within a few days.
Amount of pre-settlement loans in Nevada
In most cases, loan companies advance borrowers 10% to 15% of the expected settlement amount. So if a car accident victim expects to receive $100,000 from the insurance company, the pre-settlement loan company will probably advance the victim $10,000 to $15,000.
Costs of pre-settlement loans in Nevada
Most reputable loan companies do not have upfront costs or application fees. They just expect borrowers to repay the loan plus interest once they receive their settlement. Furthermore, most loan companies do not require borrowers to repay the loan if they go to trial and lose.
In Nevada, a licensed lawsuit loan lender may not charge more than 40% annual interest rate (APR) on a loan.
Restrictions on pre-settlement loans in Nevada
There are actually no restrictions on how borrowers may spend the money they are advanced in a pre-settlement loan. Borrowers are advised to spend it on necessities such as:
- medical bills
- rent or mortgage
- car repairs
- credit card debt
But borrowers may spend the money on anything they wish.
Learn more about our Las Vegas personal injury attorneys.