Cash advances before settlement: a scam or a good convenience? — Hometown Station | KHTS FM 98.1 & AM 1220 — Santa Clarita Radio

We’ve all seen the ads aimed at recent settlement winners. You are asking to borrow some of the money to use for your expenses. What’s the catch? Let’s see how these loans work in the state of California and the associated pros and cons.

What is a pre-payment cash advance and how do I get one?

If you have an active personal injury case in California, you can apply for a specialty loan to help meet your financial needs while your attorney settles your claim. Of course, the chances of winning your case will be assessed during your application, and if your submission is accepted, your loan is approved and your funds are sent.

What is the application process and how long does it take?

Applying for a loan in court is a Easy treat. First, get prequalified by submitting an online application. Next, your loan processor will speak to your lawyer before reviewing your case. Once approved, a contract is sent to you and your attorney to complete. After return of the contract, the cash advance is deposited in your account.

What are the advantages?

Everyone has had financial problems from time to time. Most people are skeptical about getting loans to hold them back due to predatory lenders. However, there are certain advantages to getting an advance.

  • Pre-payment cash advances can help meet immediate financial needs. This reduces your risk of facing collections or difficulties due to your inability to pay your bills.
  • Taking out a pre-settlement loan can increase your chances of negotiating a higher settlement. Most claimants end up settling early because they need the money right away. The ability to take out a loan takes the financial pressure off, giving your lawyer more time to find the money you deserve.

What’s the downside?

Getting a lawsuit loan while negotiations are still ongoing may seem too good to be true. Therefore, weighing the risks before signing on the dotted line is essential. Two things to consider when considering getting an advance on your expected settlement are the repercussions if you lose and the fees and interest associated with receiving the money.

  • Pre-payment cash advances are risk free. These are non-recourse loans offered in anticipation of a settlement by litigants. If you lose your case, the loan is cancelled. Therefore, read your contract carefully before signing it.
  • Interest rates vary from lender to lender, so finding the most cost-effective financing is essential. In addition to high interest, be on the lookout for fees and taxes that added to the cost. Unexpected charges on the money you borrow can put a strain on your settlement, reducing your proceeds.


Pre-payment cash advances are a legitimate way to hold you back until your case is settled. However, you’ll need to consider the risk, interest rates, and fees before deciding if it’s worth it. Review the lender to confirm that you are dealing with a reputable company.

Do you have any current advice? Call us at (661) 298-1220 or email Don’t miss a thing. Get the latest KHTS Santa Clarita News alerts straight to your inbox. Report a typo or error, email

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