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When to use a personal loan for a lawyer
Personal loans are usually best for a one-time legal expenses. You’ll need to know ahead of time how much you need to spend — like paying for a consultation or a cut-and-dry case.
You can typically borrow between $2,000 and $100,000 at once and pay it back in monthly installments over a fixed period of time, usually between one and 10 years. Rates typically range from 6% to 36% APR, depending on your credit score, income, debts and financial habits.
Find some of the top options by reading our guide to the best personal lenders.
9 more ways to finance a lawyer and legal fees
The most straight-forward way to pay legal fees is out of pocket. But that’s not always a possibility, especially if you weren’t expecting to need a lawyer. In those situations, you might want to consider one of the following options.
Personal line of credit
- Best for: A drawn-out legal proceeding
When you’re not sure how long you’re going to need to pay legal fees, you might want to look into personal lines of credit. Instead of borrowing a set amount of funds once, you get access to a line of credit that you can borrow from at any time.
You only have to pay interest or fees on the amount you draw and can typically renew your credit line as many times as you want. Maximum credit lines vary by lenders, though many offer access to up to $50,000.
- Best for: Someone suing for damages
Hoping to win a settlement? You might want to ask your lawyer if they’d be willing to work your case for a contingency fee. Instead of paying your fees upfront and out of pocket, a contingency fee allows you to pay your lawyer with a percentage of the damages you’re paid.
Contingency fees are generally not available for divorce cases, small settlements, criminal or child custody cases.
Awards of attorneys’ fees
- Best for: Someone suing for damages
Awards of attorneys’ fees work almost exactly like contingency fees. The difference is that instead of your lawyer taking a percentage of your damages, the court orders the defendant to pay your legal fees. This is generally only an option if your lawyer thinks you have a strong legal case.
Legal payment plans
- Best for: Immigration, defendants in criminal or civil cases
Ask your lawyer if they’d be willing to draw up a legal payment plan to help you cover the cost of your case. Many have standard legal plans — and not all charge interest or extra fees. Some are also willing to accept a partial upfront payment plus smaller installments over time.
This could potentially be an easier, less expensive option than third-party financing like a personal loan if you have poor or no credit. That’s because you might not need to prove your creditworthiness to qualify, and you’ll have more room to negotiate your terms. The downside is you could end up losing your legal representation if you fall behind on payments.
- Best for: Cases that the public might stand behind
Trying to keep costs down? Reach out to your social network to raise money for your legal fees. You’ll likely pay the platform a percentage of the funds you earn, so factor in platform costs when you’re setting your goal.
Platforms like Funded Justice specialize in raising money specifically for legal cases. However, some people are more comfortable going with name brands like Kickstarter or GoFundMe.
- Best for: Any legal fee you can pay off quickly
Sometimes the easiest way to pay a one-time legal fee like a consultation is to put it on your credit card. Most law firms accept them, and it’s an easy way to meet spending minimums and earn miles or points.
You’ll want to pay it off quickly to avoid accumulating interest, since credit card rates are usually higher than those of personal loans. On top of that, having a high balance can lower your credit score.
Pro bono lawyer
- Best for: High-profile cases, low-income clients
Lawyers sometimes reduce their fees or waive them entirely on cases that they think could generate a lot of press or for low-income clients. Some law firms even require lawyers to take on a certain number of pro bono cases each year.
To find a pro bono lawyer near you, check out the American Bar Association’s list of pro bono programs in your state.
Local legal aid office or nonprofit organization
- Best for: Low-income clients
If you’re having a hard time finding a pro bono lawyer, another option is to contact your local legal aid office. These are typically nonprofit agencies that provide free legal help to individuals who can’t afford to hire a lawyer. You might be able to get help with cases involving domestic violence, child custody, eviction, public benefits, immigration or disability issues.
You can find a legal aid office near you by visiting Legal Services Corporation, an independent nonprofit set up by Congress to provide financial support to low-income Americans.
Friends and family
- Best for: Smaller legal fees
You can also reach out to your relatives and close friends for help covering your legal fees. You might not have to pay interest and if you do, it’ll probably be a low rate. Just be aware that you could damage your personal relationships if you’re unable to pay it back.
How much do legal fees cost?
Litigation costs — the total amount of money spent on a lawsuit — vary wildly depending on your specific situation. Seven of the most common fees you might run into include the consultation fee, retainer fee, hourly rate, flat fee, contingency fee, referral fee and statutory fee.
- Typical cost: Usually based on your lawyer’s hourly rate
Either a fixed or hourly fee for your first meeting with your lawyer, typically paid upfront. Lawyers generally require a consultation before you decide to use their services. You typically don’t need to pay this if you have a flat-fee case.
- Typical cost: Varies widely depending on lawyer and your case
There are two main types of retainer fees. Either it’s a set fee you pay into an account that your lawyer withdraws from as costs build up. It could also act as a down payment on your lawyer’s services and establishes that they’re working on your case.
- Typical cost: $100 to $400 per hour, as much as $1,000 per hour in specialized legal cases
Pay your lawyer per hour of work on your case. Rates can vary depending on where you live, your lawyer’s seniority and type of legal work. You’ll typically pay more if you hire a senior partner at a law firm in New York City, for example.
- Typical cost: Varies by case
A fee that covers the total cost of your case, common with cut-and-dry cases like an uncontested divorce or drawing up a will. For example, an uncontested divorce flat fee could range from $200 to $1,500, while the fee for estate planning could range from $300 to $1,200.
- Typical cost: 25% to 40% of your settlement amount
You agree to pay your lawyer a portion of the amount you’re awarded in your case, if you win. Some lawyers offer this fee on a sliding scale depending on how long it takes to settle the case.
- Typical cost: 10% to 50% of total legal fees
A fee you pay to a lawyer for referring you to other legal representation, usually in the form of a percentage of the total fees your new lawyer earns. Referral fees are restricted to specific situations in some states. Visit your local bar association’s website for more details about when a referral fee is appropriate.
- Typical cost: Varies by state and type of case
A fee set either by a statute or a court that covers your legal costs. Sometimes it’s a percentage of your earnings in a case or a flat rate. Statutory fees are common in bankruptcy or inheritance cases.
5 tips for keeping your legal fees to a minimum
Follow these pointers to keep your legal fees down:
- Compare lawyers. Shopping around not only lets you find a lawyer that’s right for your case, it’ll also help you get a feel for how much most lawyers charge for your particular type of case — giving you the confidence and leverage you need when you negotiate your fees.
- Have a budget. This seems simple, but knowing exactly how much you can afford to pay in legal fees — including extra financing — can help you weed out lawyers that charge more than you’re able to pay.
- Keep calls quick and to the point. Paying by the hour? Time is money. Don’t waste it with small talk and try to prepare questions ahead of time.
- Be organized. Clearly label and organize your documents and paperwork. Write summaries of key facts that your lawyer can clearly refer to so they don’t have to spend extra time on busywork.
- Ask for six-minute billing increments. Many lawyers give you a choice between six- and 15-minute billing increments. Choosing the smaller one gives your lawyer less of a chance to round bills up and could potentially save you hundreds or even thousands of dollars.
Legal fees can deplete your savings and hurt your finances if you’re not prepared. If you can’t find a lawyer to work pro bono and don’t expect a settlement, a personal loan can be a reasonable solution for any case. You can compare lenders and learn more about how they work with our guide to personal loans.
Frequently asked questions
Answers to common questions about financing your legal expenses.
Are legal fees tax-deductible?
Not usually. You can sometimes deduct attorney fees if that attorney was involved in making you money that you pay taxes on — like legal fees from an IRS audit. If you think you might be eligible for a deduction, consult a tax attorney or accountant.
Do I always have to pay a consultation fee the first time I meet a lawyer?
No, not always. Lawyers generally don’t charge consultation fees on a flat-fee case. Sometimes it depends on the length of your consultation. For example, I was able to get a free consultation with a lawyer because our initial meeting lasted less than 15 minutes. If it had lasted longer, I would have had to pay a consultation fee.
What happens if I don’t win a settlement and my lawyer agreed to a contingency fee?
You’ll likely still be on the hook for your lawyer’s hourly fees outside of the contingency agreement, so make sure you’re prepared to cover those costs if things don’t work out as you had hoped.
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