How Do Bail Bonding Companies Make Money?

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When you are in jail and you don’t have family member or friend who is able to pay your bail, you might worry that you will be stuck there until your court date, which could be weeks or even months away. The fact that jail is highly uncomfortable is reason enough to want an early release, but you are probably even more eager to get out when you have a job to get to or a family to support.

How Do Bail Bonding Companies Make Money?

Fortunately, you have another option. When you get help from a bail bond company, they will pay your bail. However, you may wonder, how do these bail bonding companies make money if they are paying to help you? Here’s how it works.

  • Fees- Bonding companies pay your bail to the court, and they get it back once you show up to your court proceedings. That may seem like they don’t have anything to gain from helping you, but that’s not the case. Bonding companies will also charge you around 10% of your bail amount in return for their services, and that’s how they make a profit. Although you won’t get that 10% back, you still get to leave jail early, and that may be priceless.
  • Collateral- When bonding companies agree to help you, they require you to provide collateral such as real estate, a vehicle, or jewelry. This protects them just in case you skip town and fail to show up to your court hearing. If you don’t show up, the bonding company will lose the bail money, but they will seek compensation by repossessing the items you used as collateral.