Divorces can be complicated and expensive. North Virginians thinking about divorce know this reality. They can be traumatic, both emotionally and traumatic, and divorces can generate debt. As such, the thought of taking out an additional loan to pay for the process can seem like an extremely bad idea. Depending on the circumstances though, it may be a good option.
Divorce loan basics
Essentially, a divorce loan is a loan akin to a personal loan, which is used for expenses that are divorce related. This means that it is a loan that is unsecured by an asset that is paid back monthly.
And, since this is classified as a personal loan, the interest rate is generally lower than those of credit cards. Of course, a secured loan, like one for a home or car would be lower, those types of loans are often unavailable because those are disputed assets within divorces.
Divorce loan need
The key then is whether one needs the loan. This, of course, depends on the cost and one’s financial recourses. If the divorce is amicable, and the costs associated with the divorce are low, a divorce loan will not be needed. But, if it is a contentious divorce, one may be needed.
Since this is a single loan, one without the spouse as a co-borrower, another factor is credit worthiness. This is basically one’s credit score. The ability to repay is also a prime consideration.
Divorces are complicated and potentially expensive, depending on the spouses. While not a good option for everyone, divorce loans can be an essential tool for some. It is important contact a profession, like a divorce attorney, to understand one’s options both before and during the divorce process.