Most pre-settlement funding agreements allow early payoff at reduced cost. Here's when it makes sense — and when it doesn't.
Pre-settlement funding charges accrue over time. The longer the case takes, the more is owed at settlement. Reputable funders allow you to pay the advance back early at the corresponding lower payoff amount.
Early payoff makes sense if you've come into money from another source (an unexpected sale, an insurance payment, a family loan) and want to stop the charges from accruing.
Most claimants don't have the funds to pay off an advance early — that's why they took the advance in the first place — but the option exists.
AARC's payoff schedule shows the lower payoff amounts at earlier milestones, so you always know what early payoff would cost.
If a funder won't show you the early payoff numbers or charges a prepayment penalty, that's a red flag.
Call (800) 297-3834 to discuss your specific situation.
