Waiting for Money From an Accident Claim? Here’s How to Cope

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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Getting in an automobile accident can be expensive — even if you’re not at fault.

Car accident loans could be an option to cover costs in this case because even though you might be reimbursed ultimately, many initial expenses such as car rentals, doctors visits, and repairs come out of your pocket. You also have to consider the cost of missing work to attend various appointments.

If you don’t have the money to cover these immediate expenses, you could find yourself in a tough situation. Here are some ways to bridge the gap between when the accident occurs and when your insurance settlement money comes through.

1. Borrow from friends and family

If you have family or friends who could lend you money, you might consider setting up a payment plan with them. Borrowing money from people you know can be awkward, but there are strategies that can help you avoid drama.

Some people tap friends and family by setting up a crowdfunding campaign for their medical bills. Check out tips on how to create a successful crowdfunding campaign.

2. Use a low-interest credit card

You might consider opening a low-interest credit card and using it to cover accident-related expenses while waiting for your settlement. If you open a card with a low introductory rate, such as a 0% APR during a promotion period, you could charge all your expenses to this card and pay it off with your settlement money.

However, be careful of how long it might take for your settlement to come through. If the introductory rate expires while you’re waiting for your check, you could be in a doubly stressful situation.

3. Consider a personal loan

A personal loan might offer another solution for your accident-related expenses. Getting a personal loan to cover your accident costs is different from taking out car accident loans or insurance settlement loans.

A personal loan is a general loan that provides funds you can use for almost anything.

If you get approved for a low interest rate and choose a multiyear term, you’ll have less stress about how long the accident claim might take because you won’t have to worry about the interest rate going up like you would with a credit card promotion. You do, however, have to make monthly payments.

If you choose a personal loan with no prepayment fees, you can repay the entire amount when your accident claim is settled. Lenders such as SoFi and Upstart don’t charge a penalty for early payment.

This option could be useful if you have good credit and can afford to make monthly loan payments from the time you sign for the loan to when your insurance check comes through.

4. Try to avoid car accident loans

You might see advertisements for car accident cash advances or insurance settlement loans, which use your upcoming settlement as security on the amount you borrow. The lenders know you expect to receive a lump sum, and they’re willing to lend you money based on the estimated settlement amount.

This option is available if you have bad credit and don’t qualify for a low-interest credit card or a personal loan. You also don’t have to make monthly payments, so if your budget is tight, it won’t be impacted.

But this option is very expensive because the lender will charge a fee, which can be hard to find without going through the application process. Many small, not necessarily reputable lenders offer such loans. Some lenders that offer car accident loans aren’t upfront about interest rates and fees.

In general, you’re better off avoiding this product and trying to make the first three options work.

Keep detailed records

It’s of critical importance to develop a system for keeping track of all your expenses related to the accident. Your insurance adjuster will want to know what you paid for and why as they go through the process of adjusting your claim.

A simple way to monitor your accident-related expenses is to list them on a spreadsheet — and don’t forget to save all the receipts in a handy place, including those related to your health expenses. Be sure to take photographs of any damage to your vehicle and property.

You also should keep up-to-date notes about your physical condition. It can be helpful to keep a journal of injury symptoms as well as have written correspondence with your health care providers that you can give the insurance adjuster for reference.

Create an emergency fund for the future

There are ways to find money after an accident when you need it, but it’s best to start saving toward an emergency fund so you have a financial cushion if disaster should strike. Once you get through these tough times and can take a breather, start thinking about how to create a healthy emergency fund for future expenses.

You will want to do two important things:

  1. Determine how much money should be in your emergency fund. The amount will depend on many factors, such as whether you rent or own a home, what your monthly expenses look like, and how worried you are about long-term issues that could prevent you from working.
  2. Pick a suitable process for saving money. There are many different savings plans, so find the one that’s right for you and commit to setting aside money consistently.

The most important thing to focus on after an accident is getting yourself back to good health. The stress of wondering how you’ll afford all the costs associated with the accident can stall your recovery. Find a solution that works for you and helps alleviate that stress so you can let your body heal.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.58% APR to 14.87% APR (with AutoPay). Variable rates from 6.275% APR to 12.575% APR (with AutoPay). SoFi rate ranges are current as of July 16, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.275% APR assumes current 1-month LIBOR rate of 2.10% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.28% – 14.87%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.