Legal financing services provides financial help to those clients who are not financially well equipped to carry out a legal fight. Legal battles are not always fought between two even sides and the economically weaker party needs some help from outside to sustain the fighting process.
Legal financing companies provide the cash advance to fight a legal case. The lawyers, who are not allowed to provide any kind of financial help to the client, can recommend to their clients, various litigation financing options. There are different types of legal financing and individuals can select from the best one.
Legal financing is available for the law firms also.The financing companies charges some interest on the the borrowed money, or sometimes it takes a certain part of the settlement, or a monthly fee.
Actually legal financing is a kind of investment, the company invests in the case through the borrower, and like all other investments it should also fetch some gains. The financing companies use to asses the chance of winning and the would be financial gains of the applicant, and after that the company decides the amount of the loan.
There are several re-payment options available for the borrower:
The first option is the flat-rate payment that is to pay a fixed amount, according to the conditions, to the finance company. The final payment may include some 10-15 % interest on the borrowed money.
The second re-payment option is recurring payment, which should be made every month. It is like paying installments or paying premiums and this re-payment option may cost a little more because interest rates are higher in these cases.
One should choose the mode of re-payment very wisely before taking the loan and should always consult his/her lawyer who is fighting the case in the court. One can choose the flat rate if it is expected that the case is going to be dragged very long. On the other hand, if quick settlement is expected, the recurring option can be selected.
Last Updated on : 1st August 2013