Independent legal advice (ILA) is becoming an increasingly popular option for loan guarantors seeking guidance. With the shift to online advice services over face-to-face services also growing, it’s easier than ever to receive guidance no matter where you’re located.
Anyone seeking to secure a loan should first understand the implications of what they’re putting their signature on, and the best route to take in ensuring this is by seeking ILA.
What is ILA?
Independent legal advice simply provides you with an independent solicitor when you’re involved in transactions that can put you at risk.
You’ll hear this term most often when entering into transactions such as mortgages, where lenders can tweak agreements to their advantage. ILA ensures that you fully understand all the risks involved, and provides you with a certificate from the solicitor to attest to this, complete with your signature.
You may be encouraged to seek independent legal advice – or even be required to get a certificate – for certain transactions to take place. Lenders in mortgages don’t want to risk potential legal issues if a borrower alleges that they were coerced into signing or feel they were wronged by their arrangement.
Guarantors may be taking on reliabilities or sacrificing some of their rights without even realising, so it’s integral that all parties are in agreement.
Banks and private lenders especially can demand that you get independent legal advice (and an official certificate) before finalising your transaction, a process that is becoming increasingly prevalent since a law was passed. Guarantees are now no longer given unless the guarantor of the loan goes through ILA beforehand.
It’s also important to note that the independent solicitors you use must be impartial, ensuring all parties are treated fairly in the arrangement.
Common ILA Services and Advice
As previously mentioned, mortgages are the most common example of independent legal advice, as the contracts can contain all sorts of caveats that a solicitor can help their client to navigate and comprehend. These can include repayments, penalties, and unfavourable agreements.
Other common services where independent legal advice is required include director’s contracts and personal contracts. Like with mortgages, solicitors will explain the full loan repayment plan and elucidate the pros and cons of your transaction agreement.
These are only brief summaries of the content that is covered through ILA. More nuanced information, advice, and services can be found online, such as those available at https://www.samconveyancing.co.uk/news/conveyancing/independent-legal-advice-4849.
Next Steps
Once you’ve found a solicitor and fully understand the agreement, you’re given a certificate to sign, used as evidence for your lender. Provided all parties involved are satisfied, you should be on your way with a secured loan and any anxieties weighing on you relieved.