About the loan
What can the loan be used for?
The loan is regulated under the Consumer Credit Act 1974, and can be used solely to pay for any disbursements associated with your clinical negligence or personal injury legal proceedings, for example court issue fees, medical reports and GP records.
We fund all or part of a case.
How does the loan work?
The loan is a pre-approved facility. The money is drawn down as it is needed and paid directly to your solicitor to reimburse them for disbursement costs associated with your case. You do not have to use the entire loan amount and interest only accrues once the money is sent to your solicitor’s account. So, while funding is always available, you only pay for what is used.
The loan contract is between you and Novitas. Your solicitor has an obligation to communicate to us any material facts that may affect repayment of the loan during your case and to pay off the loan from any proceeds received as part of your settlement. The remaining amount will be passed on to you.
An insurance policy is in place to cover repayment of the loan in the event your case is not successful.
How much does the loan cost?
Our charges are transparent and straightforward.
If your case is lost, you do not have to pay anything. If you win Novitas is repaid from your award. This will include:
- An administration fee of £75 for each of the first five amounts drawn down from your loan. This is taken directly by Novitas and added to the amount drawn down.
- An interest rate of 15% per annum on any amounts drawn down. Interest is only charged on the money drawn-down, not the whole facility.
Recent legal precedent may make a proportion of the interest recoverable from the other side. This is not guaranteed however. You should assume that the interest is to be repaid from your settlement.
Interest is accrued only on the money you use and calculated at a fixed rate of 15% per annum or 1.25% per month (not compounded), and due only when your case is complete and at loan settlement.
We take the annual interest rate of 15% (1.25% per month), multiply by the amount of the facility they have drawn and divide by the number of days that the money has been drawn down. For example, if you use £10,000 for 6 months, you will pay back interest of £774.
Total Amount of Credit: £100,000
Total Charge for Credit: £22,455 includes:
- £75 administration fee
- £22,455 loan interest (assumes full loan amount drawdown on day 1)
Rate of interest: 15% per annum (fixed)
Duration: 18 months
Total Amount Payable: £122,530
Representative APR 15.1%
How long do I have to repay the loan?
The agreement has no fixed duration, but will last at least 12 months. Your loan must be repaid when your case concludes.
Do I have to have insurance?
Yes. Your loan must be covered by a Recourse Policy Schedule which will repay the loan if your case is not successful.
How is the insurance arranged?
Your solicitor will arrange the insurance with our approved insurer. The cost of the insurance is deferred until your case concludes, and is only payable if you win. If your case is lost, you do not have to pay the premium.
What happens if my case is unsuccessful?
Novitas is repaid from the insurance policy so there is nothing for you to pay.