Legal Fee Personal Loans
Find the best personal loan to cover your legal expenses by comparing your options here with Savvy.
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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
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How to compare legal fee personal loans
Interest rates
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.
Fees
Additionally, your loan is likely to come with a set of fees that you’ll be required to pay. Like interest rates, these differ between lenders, but they typically fall within the following ranges:
- Establishment fee: from $0 to $595
- Ongoing fees: from $0 to $10
- Early repayment fee: from $0 to $600+, depending on the length of the loan left
- Late payment fee: from $15 to $35
The former two fees are represented in your loan’s comparison rate, which is a combined figure comprising them and your interest.
Loan security
Unsecured personal loans are, by far, the more common of the two and avoid the need for you to put a valuable asset up as security for the loan. This makes them quicker to process and more available to a wider demographic of borrowers.
Secured personal loans do utilise an asset as collateral, which means they’re not as fast but are cheaper in terms of rates and fees and can potentially expand your borrowing power up to $100,000.
Loan amounts
Not all personal loan financiers are the same when it comes to the borrowing ranges that they offer for their loans. Some offer maximum amounts lower than $100,000 while others, more commonly, will set their minimum loans at $5,000 instead of $2,000.
If you’re looking at a smaller amount, or a particularly large one, you should double-check your lender’s loan criteria to ensure your desired amount fits within their parameters.
Loan terms
Similarly, different lenders offer different maximum and minimum loan terms. It’s imperative that you find the right loan length, as your personal loan should always be paid on terms that you’re comfortable with.
Even a year shorter than your preferred length will cost a significant amount more each month, while a year longer will result in higher overall interest accrued across the life of the loan.
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