Education
Common Myths About Pre-Settlement Loans
• 2 min read
Misinformation keeps injured claimants from a legitimate financial tool. Here are the most common myths and the reality.
Myth: 'It's a high-interest loan.' Reality: It's non-recourse funding with a capped total payoff, structurally different from any loan.
Myth: 'My attorney won't allow it.' Reality: Attorneys can't lend you money themselves, but they routinely refer clients to reputable funders.
Myth: 'It will hurt my credit.' Reality: AARC doesn't pull credit and doesn't report to bureaus. No credit impact in either direction.
Myth: 'I'll owe the money even if I lose.' Reality: Non-recourse means no obligation if the case loses. You keep the funds.
Myth: 'The funder will take over my case.' Reality: AARC has no role in case strategy, settlement decisions, or attorney-client matters.
Call (800) 297-3834 to ask any other question you have.
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.
