Education
Lawsuit Loan vs HELOC: Different Risks, Different Costs
• 2 min read
Home equity lines look cheap on the surface but put your house at risk. Pre-settlement funding doesn't touch your home.
Home equity lines of credit (HELOCs) typically charge lower interest rates than other consumer credit, but they're secured by your home. Missed payments can ultimately lead to foreclosure.
If you're already financially strained because of an injury, taking on a HELOC payment is a real risk. Lose your income for a few months and the home is on the line.
Pre-settlement funding is non-recourse — secured only by your case, not your home. No monthly payments, no foreclosure risk, no impact on your credit.
For some claimants with significant equity and confidence in their case timeline, a HELOC is the lower-cost option. For most, the safety of non-recourse funding outweighs the rate difference.
Talk to AARC about your specific situation — we'll help you think through which tool fits your circumstances best.
Call (800) 297-3834 or apply online for a no-pressure conversation.
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.