In many cases, when a party goes to trial, they will need extra funding in order to partake in the actual litigation process. Settlement loans may be more popular in the case that the plaintiff simply does not have the necessary financial means to provide for the adequate legal support in order to have an opportunity to win the case. However, settlement loans are commonly used in the case that the parties involved in a particular legal dispute reach a settlement that entails the transfer of funds from one party to the other as compensation.
In such a case, the party responsible for furnishing such funds may not have the means to provide for the settlement provision involving money, though the settlement itself will prove to be more beneficial than continuing the litigation process. Settlement loans are meant to provide for legal funding to a party in order to meet the financial terms that may be included in a settlement.
Settlement loans are one of many different types of legal or lawsuit funding. Lawsuit funding itself rose to popularity during the 1990s and has grown to become quite a thriving business. Furthermore, there are various types of settlement loans that are now available to clients, with many including provisions that repayment will not be necessary if the case does not go to settlement.
Settlement loans are dispersed in various ways, which will depend on the nature of the case, the overall strength of the case, and the amount of time in which a settlement is expected to be reached.