How To Decide If A Divorce Loan Is Right For You

A divorce can be one of the most challenging events in your life. Besides the massive emotional toll, it often brings significant financial fallout as well. 

Applying for a personal loan is one way to cover expenses such as lawyer fees. But going into debt may not be very appealing, particularly if your income is about to take a hit. However, depending on your situation, a divorce loan may be ideal for moving on financially. 

US News My Money explains when you should get a divorce loan.

Should You Take Out A Divorce Loan?

The answer depends on the various divorce expenses, as well as your financial situation. These costs range and can hinge on many factors. For example, if the divorce is civil and you keep legal costs down, a loan may not be necessary.

However, if you have to go to court, you’ll have a mountain of expenses stemming from depositions, experts, hearings, and everything in between. 

According to a 2019 divorce survey by Martindale-Nolo Research, the average uncontested divorce can run a couple thousand dollars. On the other hand, a contested divorce could be upwards of $10,000, and a divorce brought to court may surpass $20,000.

Divorce complicates everything, and your finances are no exception. You and your ex will have to reassess your daily budgets and emergency expenses if you share limited funds.

The court could help by ordering one spouse to make payments or permitting both of you to use the same account. In the meantime, a divorce loan can cover the shortfall until you can use those funds.

Can You Get Approved For A Divorce Loan?

The divorce itself can make it harder to access a divorce loan, particularly if you’re uncertain if you can afford the payments once the divorce is finalized. If possible, don’t seek a loan until you know what your financial situation will be for sure.

A financial counselor can help you manage your costs and outstanding payments. If you’re in serious debt, a divorce loan may not be right for you.

“You need to consider your ability to repay as well, if you’re going to take on a new loan,” Rod Griffin, Experian’s senior director of public education and advocacy, told US News My Money. “Divorce can make it difficult to know. You’re trying to set up a new, independent life and figure out what housing, transportation and utility costs are going to be. Then you have to pay off this divorce cost as well, which adds to your financial burden.”

When Should You Get A Divorce Loan?

If you’re unsure whether you should seek a divorce loan, start by checking your credit history and assessing your debt. A loan could be a good way to consolidate and get out of debt. It could also help rebuild your credit if your history is cut short after being taken off shared accounts. “It’s beneficial in that sense,” Griffin noted. “It can help you establish and build credit history that will work for you in time.”

At the same time, a divorce loan isn’t right for everybody. Loans are one of the most common types of debt, and a steep interest rate can exacerbate an already volatile financial event.

You may not be able to afford monthly payments, a new home, or divorce expenses on your income alone. “Taking on debt, if possible, should be the last resort. You likely already have joint debts and are responsible for repayment of some of those as well. Taking on additional debt on potentially reduced income and reduced assets can make it even more difficult,” Griffin advised.

No matter what, never accept predatory loans. These temporary loans come with astronomical interest rates that can trap you in a cycle of debt — which is the last thing you need during a divorce.

Other Ways To Cover The Costs Of A Divorce 

Besides divorce loans, here are several alternatives to help you cover expenses:


  • Talk to your lawyer about a repayment plan. Chris Browning, the host of personal finance podcast “Popcorn Finance,” told US News My Money that negotiating legal costs “could be a way to mitigate these costs and avoid some of the higher-interest options, like credit cards or personal loans.”


  • Apply for a home equity line of credit if you managed to keep your house. These often have more affordable rates compared to personal loans.


  • Ask friends or relatives to lend you money, but only if you are certain you can repay them. The last thing you want is to cause a rift in another relationship.


Lastly, you could consider tapping your retirement savings. However, Browning and many other experts advise against this since “Typically when people move money from a retirement plan, they don’t move it back.” 


What To Do When The Divorce Is Finalized

When everything is said in done, you and your ex will need to navigate your new financial situations.

Assess your income and assets and take note of your expenses by creating a budget. “It’s important to remain responsible with your finances and living within your new budget after such a major change,” Jeffrey Arevalo, a financial wellness expert from nonprofit GreenPath Financial Wellness, said.

He added, “Divorce can be an opportunity for a fresh start, and ideally you want to put yourself in the best position to succeed. Set goals, stick to the plan, and you can regain your financial health perhaps quicker than you thought.”


  • Musinski, Bob. “What to Consider Before Getting a Divorce Loan.” U.S. News & World Report, U.S. News & World Report, 17 July 2020,


Ian Schindler