Education
Lawsuit Loan vs Credit Card Debt: Which Costs More?
• 2 min read
Maxing credit cards during a long injury case can cost more than a pre-settlement advance. Here's how to think about it.
Credit card APRs commonly run 20% to 30%, compounding monthly. Over 18 months of a typical injury case, a $10,000 credit card balance can grow by $3,000 to $5,000 in interest alone — and that's with you making minimum payments.
Pre-settlement funding has a total cost that's capped in the agreement, no monthly payments, and no recourse if your case loses. For comparable advance amounts and case timelines, the total cost is often lower than the credit card alternative — and structurally safer.
Credit card debt also has to be paid every month from your post-injury reduced income, while pre-settlement funding waits for the settlement.
If you're using credit cards to cover living expenses during a long case, talk to AARC about whether a pre-settlement advance would replace that debt at lower total cost.
Call (800) 297-3834 or apply online for a written cost comparison before you commit.
We'll give you a clear payoff schedule so you can compare apples to apples.
Frequently asked questions
- Will taking an advance reduce my settlement?
- The advance plus its flat fee is repaid out of the settlement, so your net proceeds are reduced by that amount. It does not affect the gross value your attorney negotiates.
- Is a pre-settlement cash advance a loan?
- No. It is non-recourse funding tied to your personal injury claim. There are no monthly payments, and if your case does not recover, you owe nothing.
- Do I need good credit or a job to qualify?
- No. AARC does not run a credit check and does not require employment or income verification. Approval is based on the strength of your claim and your attorney's representation.
- How fast can I get funded?
- Most approved applicants receive funds in as little as 24 hours once AARC has the case documents from your attorney.
- How much does it cost?
- AARC uses a flat fee rather than compounding monthly interest. Typical advances are $500, $750, or $1,000, and the illustrative payoff at settlement is 2x the advance amount.
About the author
Written by the funding team at AARC — Accident Advance & Resource Center. AARC underwrites pre-settlement cash advances for personal injury claimants and works directly with plaintiff attorneys across 45 states. Our team reviews case documentation daily and writes from that firsthand experience.
This article is general information, not legal or financial advice. Always confirm details with your attorney. Contact AARC or call (800) 297-3834 with questions about your specific case.