Why Choose Non-Recourse Funding Over Traditional Loans?

Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects.

When exploring legal financing options, you’ll likely counter a lot of unfamiliar terms. For example, what exactly is “non-recourse funding?” And what makes it better than a traditional personal loan?

Non-recourse funding is a type of legal financing you don’t need to repay if you lose your lawsuit. It poses no risk to you and has many benefits over typical loans. Here are just a few reasons to consider non-recourse funding instead of traditional lawsuit loans.

No Interest

When you take out a traditional loan, you must repay interest on top of the loan amount. Lawsuit loans are known for their steep interest rates, often 60% or higher. For reference, on a $10,000 loan paid back over 24 months, a 60% interest rate would lead you to pay an additional $7,393.02 on top of the $10,000.

You don’t want interest to eat away at your compensation award. With non-recourse funding, you won’t owe any interest on your financing amount. Instead, Rockpoint Legal Funding takes a small percentage of your settlement amount as a fee. Before you agree to the settlement advance, you’ll know this percentage up front.

No Monthly Payments

Traditional loans typically require you to repay the loan amount through monthly payments. These payments include a portion of the loan amount plus interest.

If you need all of the money you financed through the lending company, you may be unable to spare any monthly payments before your settlement comes through. But with non-recourse funding, you won’t need to pay any portion of the settlement advance back until after the compensation check hits your account.

Many lenders even take the advance right out of your settlement before sending you the remaining amount. You won’t have to worry about repaying the advance on time or facing penalties if you don’t.

No Credit Check

Traditional lenders evaluate your credit score and credit history to determine your eligibility for a loan. If you have a low credit score, they may see you as an untrustworthy borrower and deny your application — or charge steep interest rates to mitigate their risk.

Meanwhile, non-recourse funding doesn’t rely on your credit score or financial history. Because settlement checks collateralize this type of financing, all that matters is the strength of your legal case and the potential value of your settlement. Lenders don’t care much about your financial situation as long as you have a solid case.

While a poor credit history could hurt your chances of qualifying for a traditional loan, it won’t affect your eligibility for non-recourse legal funding.

Faster Processing

Traditional lenders must review several pieces of information before approving your loan application. They pull your credit report, review pay stubs and tax documents, and assess your existing loan obligations to determine your eligibility for a new loan. This process sometimes takes a few weeks.

Legal financing services only need to evaluate your lawsuit, not your financial circumstances. Many can approve you for a loan within one to two days. These services offer fast financial relief for plaintiffs who are often facing mountains of expenses.

No Income Requirements

If you’re recovering from a car accident or a slip-and-fall incident, you’ve likely had to take time off work. Your income may not be as high as normal, or you may have stopped working altogether.

Thankfully, you don’t need to meet any income requirements when applying for non-recourse funding. The financing service will look at the value of your legal case rather than any personal financial criteria. You can still qualify for a settlement advance if you don’t have a job.

Hassle-Free Application Process

Applying for non-recourse funding is as easy as filling out a quick online form. The lender will contact your attorney directly to review the details of your case and confirm your eligibility. The process usually takes no more than a few days.

You don’t need to spend time gathering tax documents and income statements like you would when applying for a traditional loan. This is especially helpful when you’re likely already dealing with arduous, stressful documentation as part of your lawsuit.

No Risk If You Lose Your Case

The way non-recourse funding works for legal cases is that repayment is contingent on your case’s success. If you lose your legal case, you won’t be responsible for paying back the settlement advance.

This is a huge advantage of non-recourse funding over traditional loans. There’s no risk in you taking out a settlement advance. Your lender assumes that risk instead, which means they’ll foot the bill if you lose your case while you can still keep your advance.

If you’ve already hired an attorney and initiated a lawsuit against the at-fault party in your accident case, you are likely already in a strong legal position. This means there’s a good chance you’ll qualify for funding. In the unexpected event that you lose, there’s a greater risk to lenders than to you.

Rockpoint Legal Funding: Your Source for Flexible Non-Recourse Funding

If you’re experiencing financial hardship and can’t wait for your lawsuit settlement check to arrive, non-recourse funding is a risk-free solution to consider. You’ll face no personal liability for the loan if you lose your case, and you may qualify for funds within as little as a few days.

Want to know how lawsuit loans work and why non-recourse funding is the better option? Wondering whether you’d qualify for pre-settlement funding? Contact Rockpoint Legal Funding today at 855-591-2489 for your free case evaluation.