Going through a divorce is both emotionally and financially draining. If your spouse contests your divorce, you should consider that attorney fees and costs in your case can run into tens of thousands of dollars.
Depending on your financial situation, if you go from a two-income family to a one-income one, you might find yourself straddled with debt after your divorce.
Borrowing Money For Your Divorce Case
Divorce is financially draining, especially if the case is contested
Before you apply for a personal unsecured loan to cover your legal fees in a divorce case, consider the following information carefully.
- Payment of interest: While interest rates on personal loans are usually substantially lower than on credit cards, you will still have to pay interest on your loan.
- Qualifying for a loan takes work: Depending upon your income and credit score, it may take some time to obtain a loan – especially without collateral.
- Personal loans usually come in a fixed amount: When you apply and get accepted for a personal loan, you receive a fixed amount of money. If your divorce costs more than what you expected, you will need to take out an entirely new loan.
- Lump-Sum Loans: The danger here is that since you receive the entire amount upfront, you will likely be paying interest on borrowed money you may only need for a few months. Yet the interest still accumulates.
Qualify for an unsecured loan?
You will need to determine if you can qualify for a loan. Suppose you have excellent credit and a FICO® score of between 700 to 850. In that case, there is a good chance of qualifying for a personal loan with a reasonable interest rate.
Depending on the amount you want to borrow, qualifying for a personal loan without collateral, with a credit score of between 580 to 650, will be more difficult and will likely carry much higher interest rates.
Advantages of working with an online lender.
According to Experian, online lenders are usually easier to work with, have faster approval times, and are usually more flexible with borrowers with less-than-perfect credit.
If you are committed to getting a personal loan for your divorce, use an online service that will run a comparison for you on lender loan amounts, terms, interest rates, and fees.
Keep Borrowing To A Minimum
Borrowing for divorce legal fees could leave you in a difficult position once the divorce is finalized. Throwing money at an emotionally charged problem like a divorce can put you in serious debt, so it’s advisable to look for ways to cut costs during the divorce. See our discussion on the benefits of frugality.
Consider A Mediated Divorce
A mediated divorce usually costs considerably less than litigating your case in divorce court. Learn more about the many emotional and financial advantages of mediating your divorce.
Lenders
Make sure to shop around for the most affordable financing possible. You want to avoid starting your new life in debt.
