Hidden Fees in Lawsuit Loans: What to Look for in the Contract
4 min read read
Published Apr 2, 2025
It’s Not Just About the Interest Rate
When comparing funding offers, most people look straight at the interest rate. While that is important, it is often a distraction technique used by predatory lenders. They might offer a low interest rate to get you in the door, but then pack the contract with "junk fees" that can add hundreds or even thousands of dollars to your final payoff amount.
These fees are often deducted directly from the cash advance before you even receive it, or they are added to your balance monthly, compounding alongside the interest.
The Most Common "Junk Fees"
Here are the specific terms you need to scan your contract for:
1. Origination/Processing Fee: A fee charged just to open the file. Some companies charge upwards of $200-$500 for this.
2. Archiving or Document Fee: This is a sneaky one. Some lenders charge a monthly fee (e.g., $50/month) just to "keep your file open." Over a 2-year lawsuit, that’s $1,200 in fees alone!
3. Underwriting Fee: A charge for the time they spent reviewing your case. At World Legal Funding, we believe reviewing your case is our cost of doing business, not yours.
The "Delivery" Fee Trap
Finally, watch out for exorbitant delivery fees. While it costs money to send a wire transfer or overnight a check, some companies mark this up to ridiculous levels, charging $100 or more just to send you the money.
Our Advice: Ask for a "Payoff Schedule" before you sign. Ask the representative, "If my case settles in 12 months, exactly how much will I owe, including ALL fees?" If they can't give you a straight answer, do not sign.
