How to Get a Personal Loan for Legal Fees

Legal fees can be complex. There are many different types, and they can add up quickly. While every case is different, many find themselves spending thousands of dollars just to employ the services of a lawyer.

For example, legal defense fees for a DUI quickly reach upwards of $8,000, and a collaborative divorce can cost anywhere between $25,000 and $50,000. Other cases can cost just as much, if not more, depending on what percentage a lawyer is paid if he or she wins the case. Additionally, you could be required to pay a retainer fee (more on that below) up front, which depends on your lawyer’s hourly rate, which can easily reach several thousand dollars.

Long story short, legal troubles can quickly become costly troubles, leaving many to consider taking out a personal loan for legal fees.

How Legal Fees Typically Work

If you plan on taking out a personal loan for legal fees, it’s important to identify the types of fees you may incur and get a general idea of how much money you’ll need to borrow. Though lawyer fees vary, here are a few fees you will likely need to account for:

• Retainer: A retainer can be considered as somewhat of a down payment and is typically required up front before the lawyer works on the case. In most cases, the retainer is then used to cover a portion of the fees that are incurred throughout the process. Retainers are typically non-refundable, however, so if you decide to stop working with a particular lawyer, it’s likely you won’t get that money back.
• ​Hourly costs: Much like it sounds, this is a fee a lawyer charges per hour to work on your case. For example, if the lawyer’s fee is $100 per hour, and they work on your case for seven hours, the fee would be $700. The hourly fee depends on a variety of factors, including the type of case, the lawyer’s experience, and even your geographical location.
• ​Litigation costs: “Litigation costs” is somewhat of a catch-all phrase that includes attorney fees, court fees, and copy fees, as well as fees related to obtaining or hiring witnesses, accessing records, recreating an accident scene, etc.
• Contingency fee: A contingency fee is a percentage of the sum awarded if you win the case, resulting in a monetary sum. For example, if a case resulted in an award of $60,000 and your lawyer charged a one-third contingency fee (which is common), the fee would be $20,000. As the name would suggest, this fee is contingent on the outcome of the trial, and if the lawyer loses the case, a contingency fee will not be paid.

Why Legal Loans Could Be Your Best Bet at Covering Lawyer Fees and Other Expenses

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For some, getting a personal loan for legal fees may be their only option. Fortunately, there are a variety of online lenders that provide legal loans. Many of those lenders allow potential borrowers to check out the loan logistics (rates, terms, and limits) without a hard credit check, meaning you can shop around without damaging your credit score.

Though few lenders specifically call out “legal fees” as a reason for a loan, many lenders will allow qualifying borrowers to use the loan funds in any way they choose.

Personal Loans for Legal Expenses

Eligibility can be based on a variety of unique factors and can vary from lender to lender. However, most lenders require borrowers to have a good credit score (670 or higher), a reliable source of income, and an active bank account. Additionally, borrowers in the United States are typically required to be citizens or permanent residents who are at least 18 years old. However, there are non-U.S. citizen personal loan options.

That’s not to say a low credit score will disqualify you from all personal loan options. Many lenders, like Avant, Upstart, and LendingClub, extend personal loans to those with credit scores as low as 580. However, you will likely be required to pay a higher APR for those loans, which can increase your original court costs considerably over the term of your loan.

Another important factor to consider is how much the lender will allow you to borrow. This can also vary, though many lenders will approve loans as high as $35,000 to $50,000. Some lenders even grant loans for $100,000, depending on your credit score and income.

If you have existing or approaching legal fees and need a way to pay them, a personal loan might be a reasonable option for payment. As you review your sources of financing, be sure to get a firm idea on how much you may need, and shop around to review the best personal loan lenders and rates.