Guide
When you're considering pre-settlement funding, one of the most important factors to understand is how the cost of your advance is calculated. Not all funding companies use the same pricing model—and the difference between compound interest and flat-rate pricing can dramatically impact how much of your future settlement you keep.
At Instabridge, transparency is a core principle. This article breaks down the difference between compound interest and flat-rate terms so you can make an informed, confident decision.
Why Pricing Structure Matters
Legal funding is designed to support plaintiffs during long lawsuits—not trap them in excessive repayment. Unfortunately, some funding companies use aggressive pricing structures that can cause the repayment amount to grow rapidly over time.
Understanding the two main pricing models helps you protect your financial future.
What Is Compound Interest?
Compound interest means the cost of your advance grows every month, because interest is calculated not only on the original amount—but also on the interest that has already accumulated.
In simple terms:
interest on top of interest.
This can cause repayment to increase significantly, especially during long cases. For example:
If your case takes 18–24 months
And the funding company compounds interest monthly
Your repayment could end up several times the amount you received
This is why compound-interest funding is considered predatory within the legal funding industry.
What Is a Flat-Rate Agreement?
A flat-rate funding agreement uses a simple, fixed fee structure. Instead of growing every month, your cost is:
Predictable
Capped
Fully transparent from day one
Flat-rate pricing means you know exactly what you will repay once your case resolves—no surprises, no escalating interest.
This is the model Instabridge uses because it protects plaintiffs and ensures fairness.
Comparing the Two: A Simple Breakdown
Feature | Compound Interest | Flat Rate (Instabridge) |
|---|---|---|
Cost grows over time | Yes—exponentially | No—fixed from the start |
Easy to understand | No | Yes |
Plaintiff risk | High | Low |
Transparency | Often unclear | Always clear |
Protection for long cases | Poor | Excellent |
Designed for plaintiff benefit | Rarely | Always |
Why Some Companies Use Compound Interest
Compound interest benefits the funding company, not the plaintiff. When cases take years to resolve, compounding rates allow providers to collect extremely high repayment amounts.
This is why many companies push:
Long application processes
Confusing contracts
Pressure to take more money than needed
These tactics maximize profit at the plaintiff’s expense.
Why Instabridge Only Uses Flat-Rate Pricing
At Instabridge, our mission is to help plaintiffs—not exploit them. Flat-rate pricing ensures:
Full transparency
Fair, predictable repayment
No monthly interest
Protection during long lawsuits
Larger remaining settlement for the plaintiff
You’ll know your exact repayment terms before you sign—guaranteed.
How Flat-Rate Funding Protects Your Settlement
Because the cost doesn’t grow over time, flat-rate funding:
Preserves more of your final settlement
Eliminates anxiety about delays
Allows your attorney to negotiate without pressure
Ensures you’re not punished for long litigation timelines
This is the ethical way to offer legal funding.
Conclusion: Choose a Provider That Protects You
Understanding the difference between compound interest and flat-rate pricing is essential when choosing a funding provider. Compound interest can drain your settlement. Flat-rate pricing protects it.
At Instabridge, you’ll always get:
Transparent, fair, flat-rate terms
No compounding interest
No hidden fees
Non-recourse protection—you only repay if you win
If you need financial stability during your lawsuit and want funding that safeguards your future, contact Instabridge today. We’ll walk you through clear, honest terms that put you first.
