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What is a divorce loan?


There is no denying that a divorce can cause a lot of financial trouble. Not only are there the costs of the divorce itself but also the changes in your overall financial situation can lead to struggles.

What some people are doing to help ease the financial burden is to get a divorce loan. According to U.S. News and World Report, there is no actual divorce loan as it is simply a personal loan that you get to cover expenses from the divorce.

The pros

One of the benefits of getting a divorce loan is that personal loan interest rates tend to be lower than credit card rates. So, it is advantageous to use a loan rather than credit cards. You can also use the loan to consolidate debt and pay it off so that your credit rating will be better off once you are on your own after the divorce. This is especially nice if you did not really build your credit during the marriage.

The cons

The biggest concern with a loan is that you have to pay it back. Since your finances are going to change, you need to be completely sure that you can afford to make your loan payments once your divorce is final. Consider all the new expenses you will have and the overall change to your financial situation.

The answer

The answer to whether you should get a divorce loan or not is that it highly depends on your situation. For some people, it is the right move because they can secure one with low interest rates and reasonable repayment terms. For others, it may not work as well since they may have trouble paying it back.

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