Updated
Fact Checked
Eric McWhinnie
Many people who are going through a divorce aren't sure where to start when it comes to securing financing for legal expenses. For many of those divorcing individuals, a personal loan can be the best approach to pay for the divorce. In this article, we'll cover your options for how to pay for a divorce.
Why is a personal loan a good option to pay for divorce?
According to The Ascent's research, the average cost of divorce was $12,900 in 2020. And that's just for the legal fees you must pay to formally end your union. You need to decide how to finance the cost in the best way possible.
Personal loans can be a good option to pay for divorce for many different reasons. Here are some of the benefits associated with using a personal loan to pay divorce costs:
- You can borrow a big sum of money: Many personal loan lenders allow you to borrow as much as $50,000 or even up to $100,000. You may have more access to funds with a personal loan, while your savings or the limit on your credit card could run out sooner.
- You don't generally need collateral: In most cases, you can find an unsecured loan, which means you don't have to pledge any property as collateral. This can be beneficial in a divorce when your property may be shared marital property that's tied up in litigation and thus can't be pledged to guarantee a loan.
- Personal loans often have lower interest rates than other sources of funds: For example, the interest rate on credit cards is typically higher than the interest rate on personal loans.
TIP
How to find the best lenders
Make sure you compare multiple lenders -- otherwise, you might get stuck with a high interest rate or hidden fees. The best way to compare loans is to get prequalified with multiple lenders. To get started, feel free to check out the list of our experts' favorite personal loan lenders.
- Personal loans have a fixed repayment schedule: You'll know upfront when your debt will be paid off, so you don't have the uncertainty of debt hanging over your head indefinitely after an emergency.
- Personal loans can have repayment terms spanning several years: It's common for personal loans to have repayment terms of around three to five years, although some loans have shorter repayment timelines and others have longer timelines. This multi-year repayment schedule gives you plenty of time to pay back what you owe with reasonable monthly payments.
- You have control over the funds: If you borrow money in your own name after you've separated, your spouse has no control over what you do with those funds -- whereas using assets in shared marital savings accounts can sometimes be difficult. With a personal loan, you get the money upfront from the lender and can use it to do anything you'd like, from hiring a private investigator to track down missing marital assets to paying legal fees.
Because of these benefits, using personal loans can be preferable to many other alternative sources of funding a divorce.
Related Loan Topics
Compare the best personal loans
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Fixed: 8.99%-29.99% APR (with all discounts)
|
$5,000 - $100,000
|
680
|
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
5.20% - 35.99%
|
$1,000 - $50,000
|
None
|
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
10.49% to 19.49%
|
$2,000 - $30,000
|
720
|
Downsides of personal loans to fund your divorce
Of course, there are some downsides associated with using a personal loan to get a divorce.
- You have to pay interest: While the interest rate is usually lower than the standard rate on a credit card, you still have to pay interest on your debt. And, depending on how much you borrow and how long it takes to pay back the loan, the interest costs could add up to several thousand dollars. This makes your divorce even more expensive.
- Qualifying for a loan can sometimes be hard: Depending upon your income, credit score, and other debt obligations, it may be difficult for you to get a loan with a reasonable interest rate and good terms. This can be especially true if you were a stay-at-home spouse without income of your own or if you and your spouse have a lot of joint debt.
- You're stuck borrowing a fixed amount: When you take out a personal loan, you get a fixed amount of money that you receive all at once. You can't just request a loan increase if it turns out your divorce is more expensive than anticipated -- you'd need to apply for an entirely new loan. And, since you get all the money upfront but may pay legal fees over time, you may be paying interest on borrowed money you won't need for months.
The below calculator can give you an idea of the monthly payments on personal loans with different sizes, repayment terms, and interest rates.
Financing a divorce: Personal loan calculator
Total Amount To Be Paid
${{ getTotalAmountPaid }}
Payoff Time
{{ getExpectedPayoffTimeOutput }}
Monthly Payment
${{ getExpectedMonthlyPaymentOutput }}
Fix errors on form
You must enter Payoff Timeframe or Expected Monthly Payment
Principal
${{ getPrincipal }}
Interest
{{ getInterestPaid }}
Alternative ways to finance a divorce
As you consider the pros and cons of using a personal loan to pay for divorce, you also need to consider your alternatives. Some of your other options to fund your divorce may include the following:
- Using savings: This can be tricky if you and your spouse have joint access to a savings account. But, if you can access spare funds and pay your lawyer from available cash, you can avoid the loan application process and paying interest. The downside, though, is that this savings won't be available to set up your new life after divorce.
- Charging legal fees on a credit card: Not all lawyers allow you to charge your legal fees, but some do. If you charge your legal fees, you may have to pay a higher interest rate than you would with a personal loan -- and your credit limit may not be high enough to fully cover divorce costs. The upside is, you can borrow money as you need it and don't have to take a big loan at once -- and could potentially request a credit line increase if it turns out you need more money. If you can get a card with a 0% promotional APR, you could avoid paying interest on the money you borrow for your divorce if you can pay back what you owe within the promotional period.
- Borrowing from family: If you have family members willing to lend you money, you can also avoid applying for a loan and paying interest. Unfortunately, this could make your family relationships uncomfortable, especially if you can't pay back the loan right away. And your family members may feel like they get to weigh in on decisions you make during your divorce if they lend you money.
- Ask your attorney for a payment plan: Some divorce attorneys offer payment plans that allow you to split up the cost of legal representation. You'll likely have to put down an initial retainer, but some attorneys may allow you to pay additional costs in monthly installments.
As you can see, in many cases, a personal loan is often a better choice than other options -- but it will depend on your situation.
Be smart about borrowing for divorce
Whatever approach you choose, try to keep borrowing costs as low as possible by looking for ways to cut costs during divorce. You can often save money on divorce if you're able to negotiate on some issues outside of court through mediation.
And, be sure to shop around for the most affordable financing possible because you don't want to start your new single life with a bunch of costly debt hanging over your head.
Still have questions?
Here are some other questions we've answered:
The Ascent's best personal loans
Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
FAQs
-
A divorce loan isn't a real type of loan, however, you can obtain a personal loan and use it to pay for divorce-related expenses.
-
According to the Martindale-Nolo Research's 2019 divorce survey, the average cost of a divorce attorney was $270 per hour, though the amount charged varied significantly. The survey showed that the average person paid $11,300 in divorce fees, but a small number of costly divorces probably skew the results. The median total for attorney fees was $7,000, and 42% of people surveyed paid less than $5,000.
-
You may be able to petition the court to make your spouse pay for attorney fees if they earn significantly more than you do, depending on your state's laws. However, you'll probably have to come up with some money upfront to hire an attorney to represent you as you make your request.
Our Loans Experts
Christy Bieber is a full-time personal finance and legal writer with more than a decade of experience. She has a JD from UCLA as well as a degree in English, Media and Communications with a Certificate in Business Management from the University of Rochester. In addition to writing for The Ascent and The Motley Fool, her work has also been featured regularly on MSN Money, CNBC, and USA Today. She also ghost writes textbooks, serves as a subject matter expert for online course design, and is a former college instructor.
Robin Hartill, CFP®, is a personal finance writer and editor whose work frequently appears in various national publications. She wrote the syndicated “Dear Penny” financial advice column for four years.
Fact Checked
Eric McWhinnie
Eric McWhinnie has been writing and editing digital content since 2010. He specializes in personal finance and investing. He also holds a bachelor’s degree in Finance.
Share This Page
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has positions in Citigroup. Robin Hartill, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target and Upstart. The Motley Fool has a disclosure policy.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has positions in Citigroup. Robin Hartill, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target and Upstart. The Motley Fool has a disclosure policy.
*Upstart Loan Disclaimer
The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.
Citi Personal Loan disclaimer:
**Rates as of 10-06-2023 . Your APR may be as low as 10.49% or as high as 19.49% for the term of your loan. The lowest rate quoted assumes excellent credit, and a loan term of 36 months or shorter. Otherwise, a higher rate will apply. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
There is a 0.5% APR discount if you enroll in automatic payments at loan origination. Additionally, existing Citigold and Citi Priority customers will receive a 0.25% discount to the interest rate. If you are in default, your APR may increase by 2.00%. No down payment is required. Rates subject to change without notice.
You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Loan proceeds cannot be used for post-secondary educational or business purposes.
If you apply online, you must agree to receive the loan note and all other account disclosures provided at loan origination in an electronic format and provide your signature electronically.
Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.
Impact to credit score: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.