What are legal fee personal loans and how do they work?
Legal fee personal loans are the same as any other personal loan: they’re a product available from $2,000 to $75,000 for use on whatever you need and are able to be repaid over one to seven years. In this case, you can use a personal loan to cover any legal expenses you might encounter for any type of proceedings or area of law.
One of the primary benefits of personal loans as a means of covering legal fees is that they’re more versatile that other types of finance. While products such as car, home and business loans are only able to be used towards their namesake, personal loan funds are paid directly into your account and can be distributed however you see fit. In addition to paying for legal counsel or a settlement, you can also consolidate other debts, pay for expenses around the house or even put a bit of money aside towards a small holiday if you wanted to.
What legal expenses might I need to cover with a personal loan?
There’s a wide variety of different situations under which you might look to take out a personal loan to cover your legal expenses, with the most common areas being:
- Contested probate – challenging the validity of a will as a party with an interest in the deceased’s estate
- Family law – matters such as divorce, custody disputes over children and property and asset settlement after separation
- Personal injury – covering damages of a physical and/or psychological nature sustained as a result of a separate party
In terms of what the expenses are that you can accrue, there are myriad legal costs that can be charged both by your lawyer and the court. These can include:
- Lawyers’ hourly rates, which generally range from as low as $200 up to over $600 and can be based on:
- Travelling time to court and to consult with you (where applicable)
- Reading and researching documents
- Expenses relating to witnesses
- Other administrative costs
- Court settlements
- Out of court settlements
- The opposing party’s legal fees
- Court costs, such as daily hearing and conciliation conference fees
Before committing to a particular lawyer or firm for representation, you should always be aware of the fees that you’ll be charged for the process. Lawyers should always be open and transparent about what these fees are, outlining clearly what they’ll be charging you for and the rate at which they do so. This can be an effective way of finding the right type of legal representation, as you can save money by comparing from a wider range of options.
Types of personal loan
With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.
Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.
Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.
Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.
If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.
Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.
There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.
Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.
Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.
There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.
Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.
Why compare personal loans through Savvy?
How to compare legal fee personal loans
One of the key aspects to compare on personal loans is the interest rate charged, as this will play the largest contributing role to the cost of your loan. A difference of just 1% can cost more than $800 on a $30,000, five-year loan, for instance.
Comparing offers between different lenders is an effective way to help you save on overall interest, as you can find the lowest rates from a larger sample size. This shouldn’t be the only area in which you compare loans, though.
Frequently asked questions
Helpful personal loan guides
Still looking for the right personal loan?
Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.