Pre-settlement funding vs. a personal loan: the real differences
When an injury case is pending and bills keep arriving, people look for ways to cover living expenses until the case resolves. Two options often come up: a personal loan and pre-settlement funding. They can look similar from a distance, since both provide money now, but they work very differently. Understanding the differences helps plaintiffs and their families make a clear decision.
What repayment depends on
Personal loan. A personal loan must be repaid on a set schedule whatever happens in your case. If the case is lost, delayed or settles for less than expected, the payments are still due.
Pre-settlement funding. Millenia's pre-settlement advances are non-recourse: repayment comes from the proceeds of your case. If your case is lost or dismissed, you owe nothing. The written agreement sets out the full terms.
What the decision is based on
Personal loan. Lenders usually look at your credit history, income and employment. An injury that has kept you from working can make a loan harder to obtain.
Pre-settlement funding. The review focuses on your case, its type and the information available from your attorney, rather than on your credit score or current income.
Monthly payments
Personal loan. Payments typically begin within weeks, which adds a monthly obligation at the time money is tightest.
Pre-settlement funding. There are no monthly payments while the case is pending. Repayment is handled when the case resolves.
Your attorney's involvement
Personal loan. Your attorney is not usually involved.
Pre-settlement funding. Your attorney is part of the process, providing case information and coordinating repayment from the settlement. That coordination is also an opportunity to talk through how funding relates to your case.
How much and how fast
Millenia's advances range from $500 to $100,000+, sized to the case, and funds are sent within 24 hours of approval. Approval depends on case review; a pending case alone does not guarantee an offer.
Questions to ask before choosing
Whichever option you consider, ask for the complete terms in writing. For funding, understand how the amount repaid can change over time and see examples at different resolution dates. For a loan, understand the interest rate, the payment schedule and what happens if you cannot pay. And discuss the decision with your attorney, who can help you see how either option fits your case.
The right choice depends on your situation. The important thing is to make it with a clear understanding of what each option asks of you.
Funding is subject to case review and a written agreement. General information, not legal or financial advice.