How To Use A Personal Loan To Pay For Legal Expenses

In everyday life, a person may not need a lawyer that often. So if you do, chances are that you may not have financial savings for the matter. Legal fees can be expensive and may take a toll on your financial budget. Taking a legal loan to fill the gap is a good idea. You can use a personal loan to pay the lawyer and the legal fees. Legal fee loan is like a personal loan where you borrow money in a lump sum and repay with interest.

As personal loans don’t have and end-use restrictions, they are one of the best options to cover your legal expenses.

Potential Reasons To Consider Personal Loans To Pay For Lawyer Fees

An unsecured loan is advisable to fund legal and lawyer fees because you may not want to lose the mortgaged property like your house, car if you miss a monthly installment or for some unforeseeable reasons are no longer financially viable to repay the loan. You may require availing a personal loan for following legal situations:

• Adoption
• Child custody
• Criminal defence
• Divorce

All these matters can take a long time to settle. Before taking a loan get an estimate cost from the lawyer and make sure that includes all the additional charges and there are no potential surprises, so you can be prepared.

Eligibility Requirements For Personal Loans For Legal Expenses

Your ability to qualify for a legal or personal loan to pay legal fees depends on the following factors –

• Credit Score –

Credit score is one of the most important factors that determine your eligibility criteria for a loan. Credit score also helps determine the rate of interest for your loan. Higher the credit score lower will be the interest rates. Some lenders can offer you a loan with a credit score as low as 560 while other lenders may need you to maintain a good score of 620 and above. You can run a soft credit score check without affecting your current credit score.

• Loan Amounts –

The loan amount that you can borrow varies from as low as Rs 1,000 without cap on the maximum amount. You should very carefully decide on the loan amount. It should not be too less not to cover your legal charges and fees or too high that you end up paying extra amount as interest.

• Income

Income refers to the money earned through various sources, such as employment, investments, or business activities.

• Debt-To-Income Ratio

Debt-to-income ratio is a financial indicator that measures the proportion of a person's or entity's debt payments relative to their income, serving as an important assessment of their financial health.

• Other Monthly Repayment Payments

The loan amount that someone can avail is also determined by the borrower's ongoing liabilities. If the borrower has too many financial obligations at the moment, the lender may hesitate to provide the loan.

Conclusion

Though, personal loan or a legal loan can reduce your financial burden, you should avail a loan which best suits your repayment capacity. There are lenders which provide a legal loan to borrowers with a bad credit score but these lenders charge a high rate of interest. Having a good credit score can make you avail a loan at better terms and interest rate.

IIFL Finance offers an easy process to avail a personal loan at an attractive rate of interest. It lets you conduct a soft check on your credit score. IIFL Finance also provides flexible repayment options and a seamless online application process.