If you find yourself on this page, you’re probably considering taking out a loan.
It’s a big financial decision—one that you should not take lightly.
It helps to know the ins and outs of loans in general before making a decision.
You’re already aware that Ally can provide you with a lawsuit loan.
Still, you may wonder, What exactly is a lawsuit loan? How do they differ from other loans?
Furthermore, what sort of loan documentation will I need to take out a lawsuit loan?
These are all good questions to ask before taking out a lawsuit loan. If you have any of these questions, this guide is a good place to start.
Here, we will explain lawsuit loans in general, how they differ from other sorts of loans, and how you can apply for one today.
Differentiating Between Recourse and Non-Recourse Loans
To understand the difference between typical loans and lawsuit loans, let’s split loans into two categories:
- Recourse loans and
- Non-recourse loans.
To qualify for either of these loans, you have to show different forms of loan documentation.
When we talk about recourse loans, we are discussing typical loans—things like mortgages, automobile leases, and even payday loans.
Conversely, when we talk about non-recourse loans, we are usually referring to lawsuit loans specifically.
What Exactly Is Different About the Two Types of Loans?
We can identify two basic differences between recourse and non-recourse loans. The first difference is how they address questions of default and collateral.
When someone defaults on a recourse loan, the lender can seek repayment of the loan by whatever financial means are necessary.
The entirety of your assets is the collateral in this situation. This means that if you default on a recourse loan, your lender can repossess your home, seize assets like automobiles, jewelry, or investment products, and even garnish your wages until the debt is paid off.
Non-recourse loans—including lawsuit loans—are fundamentally different. Non-recourse loan agreements lay out specific items of collateral.
Whatever the parties agree to, that’s the collateral—no more, no less. With a lawsuit loan, the collateral in question is your eventual settlement check.
The most notable practical implication of this feature is that if you lose your case or fail to settle out of court, there is no collateral because it no longer exists.
Thus, if you find yourself in this situation, you won’t have to repay your lender a single cent.
The second difference lies in the documents you need to submit to qualify for the loan in question. We will cover both so that you can make the most informed decision on what is best for your specific situation.
Recourse Loans: What Documents Do You Need to Apply for a Loan?
Regardless of whether it is a recourse or a non-recourse loan, loan documentation serves the same purpose: it shows the lender that you can pay back the money they lend you.
With that said, recourse loans typically require much more loan documentation than non-recourse loans, including things like employment verification, income verification, and a breakdown of all assets and liabilities.
The more money you want to borrow, the more documentation you need to provide to the lender.
Non-Recourse Legal Funding: What Documents Do You Need for a Loan?
Qualifying for non-recourse legal funding requires significantly less documentation than qualifying for a typical recourse loan.
Usually, you need to provide documentation that verifies just two things:
- That you do have a lawyer and
- That lawyer is currently representing you in a civil claim.
Basically, on your loan application, you include your own personal information, a bit of information about the case, and your lawyer’s contact information.
Then, we at Ally Lawsuit Loans get in contact with your lawyer. We verify that they are currently representing you, and we seek additional information about the case.
The additional information we seek from your attorney typically includes your case’s chances of success and an estimate of your settlement’s value.
Thus, at the end of the day, the only documentation you need to submit to secure a lawsuit loan is the information requested on your application. There is no additional documentation necessary.
Ally Lawsuit Loans Offers What Others Lenders Don’t
Once you have decided to take out a lawsuit loan, you need to find the right lender. Shopping for lawsuit loans, however, is a pain.
On top of the multiple applications that you will need to submit, you will have to review the loan offers as they arrive.
Loan agreements are notoriously dense legal documents, so parsing through them takes time and it’s easy to miss minor details.
Those seemingly minor details often include hidden fees and interest rates, which, at the end of the day, could cost you a lot of money.
Luckily, you don’t have to shop around. At Ally Lawsuit Loans, we offer pre-settlement funding to all our clients with this promise:
- Never pay us anything if you lose your case,
- Application approval within 24 hours, and
- The lowest interest rate in the industry guaranteed.
With our three-part promise backing your lawsuit loan, you don’t need to worry about finding a better deal elsewhere.
Furthermore, you don’t have to worry about hidden fees and interest rates. Our loan agreements are always clear and straightforward.
If you have any questions or are ready to get started, get in touch with Ally Lawsuit Loans today!