RATESETTER is funding the legal costs of people’s divorces as part of its personal loans offering.
The ‘big three’ peer-to-peer lender has been offering a family finance product for a number of months, whereby individuals can apply for a loan to pay for their divorce litigation.
RateSetter previously lent to divorce funder Novitas as part of its former wholesale lending activities, but the partnership is thought to have been terminated by the time Close Brothers Group acquired Novitas last year.
The P2P platform offers personal loans ranging from £500 to £35,000, with terms between one year and five years, according to its website. Borrower rates range from 3.9 per cent to 29.9 per cent.
RateSetter, which recently launched its Innovative Finance ISA, is currently recruiting for a relationship manager to become “the face of family finance in the UK”.
The candidate will be tasked with driving the growth of RateSetter’s family finance product using a consultative approach to develop personalised business relationships with law firms and solicitors, according to a jobs advert.
Litigation funding for divorces has become increasingly common over the last seven or eight years, according to Claire Tollefson, managing associate at law firm Cripps.
“It’s quite common to use litigation funding as people’s money is often tied up in the matrimonial home,” she told Peer2Peer Finance News.
“Furthermore, most law firms would not want to wait until the end of the matter to get paid.”
Tollefson said that Cripps is not allowed to recommend lenders to their clients but would point them in the direction of Novitas or a similar appropriate provider.
“The main issue with these lenders is that their interest rates are so high, often up to 18 per cent, which can put clients off,” she warned.