When your lender calculates the cash advance you are applying for, the focus entirely upon the amount your car accident settlement will be.

Why is Interest So High on Pre-Settlement Auto Accident Loans?

When browsing for car accident settlement loans, you will want to get the lowest interest rate possible. Legal funding is often believed to be high in cost, from between 27% to 60% in interest rates. Many borrowers consider these loans risky as the interest rate is typically higher compared to other loans.

The risk associated with a car accident cash advance is high because you might not win your case. This is why lending money for car accident settlement loans can be so expensive. Rest assured, you are not being ripped off as much of the interest rate goes to overhead expenses and losses that the lender has to pay for. For example, if you apply for a $10,000 loan with a monthly interest rate of 5% and pay it back in 5 months, you will need to pay back $12,500. The revenue from this for the lender is lower, where there are losses for borrowed capital and other costs that the lender must cover. The revenue is far less than the 5% they get back.