Like anything else, when looking for a car accident loan, you always want to find the cheapest option out there.
Yes, like Delta Lawsuit Loans provides loans that are fast and convenient, everybody wants to get a good deal on their car accident loan.
Financial Assistance After a Car Accident
There are several line items on your car accident loan agreement that you want to look at such as the interest rate, the fees, and if your payback is capped at the end.
We’ll outline the important steps you need to take when shopping for a car accident loan below.
1) Talk to several car accident loan companies.
Although you need the money quickly, it is imperative that you talk to several lawsuit loan companies and ask the correct questions when you talk to them.
You want to know the following thing:
- What are the fees associated with the agreement? Funding companies always add fees to the car accident loan agreement that you may not know about or even notice. There are many names for them. Some are called Applications fee, case monitoring fee, Origination fee, and many others. Before you even get started, ask them to lay out what their car accident loan fees are.
- What interest rate do they charge for the car accident loan? There are two types of rates as well. Simple interest rate and compounded rate. Will go into the details below.
- Have them send you a copy of an agreement before you start getting them the documents. Tell them that you want to net $5000.00 in your pocket to see the payback schedule on the agreement.
This way if you have several contracts in front of you, it will make it a lot easier to compare who is giving you the best pricing for your car accident loan.
There are very simple steps you can take to ensure that you are getting the best pricing on your loan. If they cannot provide this information to you right away without hesitation, you might consider another car accident loan company.
2) Find a highly reputable funding company.
This is a particularly important part of your research. Don’t use the first company you see to get the car accident loan. Make sure that they are highly reputable.
There are several ways to confirm this:
Check with other friends that have taken out lawsuit loans and see if they were pleased with their company.
Talk to your attorney to see if they can refer you to a company that has given car accident loans to their clients.
Listen to the people. The best way to see if a company fulfills its promise is to go online and see their reviews. You can look at Google reviews, Yelp, and the Better Business Bureau (BBB). This is where people like you who have the need for a car accident loan come together to share their experiences.
3) Understand how they charge interest.
There are several things you need to understand about interest when it comes to a car accident loan.
You need to understand the way they calculate interest and also how often they charge interest for your car accident loan.
- Simple interest (Sometimes referred to as non-compounding interest). If the loan you $1,000.00 and charge you 3% a month, they are simply charging you the three percent on the initial 1,000.00 So in month one they will charge you $30 for the money and again in month two the interest rate will be paid on the original $1,000.00, and they will charge you $30.00 and so on.
- Compounded interest. This is a little more complicated. The interest rate, in this case, is compounding monthly and you need to pay interest on the interest from the previous month. Let us use the same example that we used for a simple interest rate. Let’s say that the car accident lawsuit loan company loaned you $1,000.00 and is charging you a rate of 3%.
In the first month, you will pay 3% on the $1,000.00, and they will charge you $30.00. This is where it gets tricky. In the second month, they will charge you 3% on the original amount PLUS 3% on the $30.00 that they charged you for the last month.
So that will be a payment of $30.90. And then the following month they will charge you on the previous interest as well so that will be an interest charge of the first $30.00 and the second $30.90 so that will be a payment of 1060.90 in the amount of $31.82.00.
As you can see, your car accident loan gets a lot more expensive when you have a compound interest as opposed to simple interest.
- Monthly interest. This is the part in your contract where they tell you now how much they will charge you interest but rather how often. The monthly interest is exactly what it sounds like.
They will charge you interest on the principal amount that they gave you on your car accident loan every single month until it is paid back.
- Semi-annual interest. This is where they charge you interest in sim month buckets. Although this may sound like a cheaper option, it is usually not.
Let’s say a company advances you $1000.00 and charges you an interest rate of 20% every six months. If you do the math, if they gave you a monthly interest rate of 3% this would sound less expensive because 3% times 6 months is 21%.
However, when they have it build-out in 6-month buckets you pay the 20% from day one. So, if they give you money in January and your case settles in April, it will still cost you 20% in interest.
4) Start before you really need the money.
This is a crucial element in securing the cheapest car accident loan.
When you are desperate for the money, that leads to mistakes and will take whatever money you can get your hands on.
We understand that as a result of your car accident, it can lead to losing your job and many other reasons causing you to look for a loan.
Plan ahead. This will give you the time to research and compare which companies can offer you the best terms for your car accident loan.
Be also guided with the rules for filing a car accident lawsuit in the United States to foresee any issues.
As you can see, these are just a few ideas of what to look out for and how to shop for the cheapest car accident loan.
The most important advice is to shop and compare.
Know More About Car Accident Loans with Delta Lawsuit Loans
The best way to plan for applying a car accident lawsuit loan is with someone who knows the tricks of the trade.
Call Delta Lawsuit Loans to know more about the best auto accident pre-settlement funding for your case.