A pre-settlement loan—sometimes referred to as a lawsuit loan, legal funding, or litigation financing—is a type of cash advance provided to plaintiffs who are awaiting the outcome of a lawsuit or settlement. Unlike a traditional bank loan, pre-settlement funding is typically non-recourse, meaning the repayment is contingent on winning or settling the case. If the case is lost and no financial award is received, the borrower generally does not have to repay the advance. Key points about pre-settlement loans include: Immediate Financial Relief Plaintiffs often have medical bills, living expenses, or other financial obligations that become challenging to meet when they’re injured or out of work. A pre-settlement loan helps ease these burdens. Non-Recourse Structure Repayment depends on the success of the lawsuit. If the plaintiff doesn’t receive a settlement or win a judgment, they typically don’t owe anything. Higher Costs than Traditional Loans Because the funding company takes on a higher risk, interest rates or fees can be more expensive than those of conventional loans. Case Evaluation The funding company evaluates the lawsuit’s merits, the likelihood of a favorable settlement, and potential payout size before approving an advance. Legal Counsel Involvement Usually, the plaintiff’s attorney coordinates with the funding company to share necessary documentation, such as case details or medical records (with the client’s consent). If you’re considering a pre-settlement loan, it’s crucial to discuss it with your attorney to ensure the terms are fair and to understand the potential financial implications, especially the fees or interest that might accrue if the case extends for a significant period.