Inheritance Loans: What to Know If You’re Considering One (2026)

Probate takes longer than most people expect. According to a 2024 study by Trust & Will, the average probate timeline in the US is 20 months — yet only 2% of Americans correctly guessed that figure. For heirs who need money sooner, an inheritance loan can help bridge that gap. But it comes at a cost, and it’s worth understanding exactly what you’re getting into before you sign anything.

What is an inheritance loan?

An inheritance loan is a secured loan backed by your expected inheritance. A hard money lender — typically a private lender or investor group, since traditional banks and credit unions generally don’t offer these — evaluates your inheritance and extends you a loan based on what you’re likely to receive.

Once the lender verifies your inheritance amount (usually by contacting the estate executor), they propose loan terms. If you accept, you receive a lump sum and begin making monthly payments. When your inheritance is finally distributed, you can typically use it to pay off the remaining balance.

Key things to know:

• You’ll need to make monthly payments while probate is still ongoing
• Interest keeps accruing until the loan is paid off — delays in probate mean more interest
• If the estate shrinks (due to creditor claims, legal disputes, or market conditions), you could owe more than your final inheritance covers
• These loans are not heavily regulated, so terms vary widely by lender

How much do inheritance loans cost?

Inheritance loans typically carry higher interest rates than traditional personal loans, because the collateral (a future inheritance) is considered riskier than a fixed asset like a home.

According to Trust & Will, interest rates on probate loans generally fall between 7% and 15%, though they can go higher depending on your circumstances. Hard money lenders specializing in real estate-secured estate loans (where the inherited property is used as collateral) more commonly charge 8% to 10% annually, plus origination fees typically ranging from 2 to 4 points (1 point = 1% of the loan amount).

Additional fees may include processing charges, document fees, underwriting fees, title insurance, notary fees and recording fees. Always ask for a full fee disclosure before signing.

Probate loan calculator

Use the repayment calculator below to estimate your monthly payments based on loan amount, term, and interest rate.

Who are inheritance loans best for?

An inheritance loan makes the most sense if:

• You have urgent financial obligations (mortgage, medical bills, living expenses) that can’t wait
• You don’t qualify for a lower-cost personal loan or home equity loan
• You’re comfortable making monthly payments while probate runs its course
• The estate is straightforward and unlikely to shrink significantly

You may want to skip the loan if your need isn’t urgent, if cheaper alternatives are available to you, or if the estate is complex enough that you’re not confident about the final payout.

Pros and cons of inheritance loans

How to get an inheritance loan

1. Find reputable lenders that offer inheritance or probate loans (hard money lenders are your main option)
2. Compare rates, fees and loan terms — get everything in writing
3. Apply and provide required documentation
4. Review terms carefully before signing — understand the full cost including all fees
5. Receive funds
6. Make monthly payments per the agreed schedule, and pay off the balance when your inheritance is distributed

Documents you’ll typically need

Beyond the standard loan requirements (proof of income and identity, employment verification), inheritance lenders want estate-specific documentation:

• Death certificate
• A copy of the will (if one exists)
• Legal documents confirming probate is open and identifying the administrator
• Documentation of your expected inheritance amount — usually provided by the estate executor

Eligibility requirements

• You must be a named beneficiary or heir to the estate
• The estate must be in probate or in the process of opening
• Lenders may require a minimum inheritance amount (this varies by lender)
• Standard creditworthiness checks may also apply — though inheritance lenders tend to weight the estate’s value more heavily than credit scores

Comparing lenders for probate advances

The two providers listed below offer inheritance advances (not loans), meaning no monthly payments and no interest — just a flat fee deducted from your share of the estate at distribution.

Inheritance loan vs inheritance advance

These terms get used interchangeably online, but they’re not the same thing.

Inheritance loan (also called a probate loan or estate loan): A traditional-style loan where your inheritance is used as collateral. You borrow money, make monthly payments with interest and repay the lender once the estate distributes your share.

Inheritance advance (also called a probate advance or estate advance): Not a loan at all. You sell a portion of your future inheritance to a funding company in exchange for cash now. There are no monthly payments — the company gets repaid directly from the estate when probate closes.

Both solve the same problem (getting you money before probate ends), but they work very differently and carry different risks and costs.

Must read: Learn more about inheritance advances

Inheritance loans vs. inheritance advances: side-by-side

	Inheritance loan	Inheritance advance
What it is	A loan using inheritance as collateral	A sale of a portion of your inheritance
Monthly payments	Yes	No
Interest	Yes (typically 7–15%)	No — flat fee instead
Credit check	Usually	No
Risk if estate shrinks	You still owe the loan	Risk falls on the advance company
Typical cost	Interest + origination fees	10–50% flat fee on advance amount
Speed	A few weeks	Often same day to a few days

Alternatives worth considering first

• Family allowance. Spouses and dependent children may be eligible for funds from the estate to cover expenses during probate. Rules about family allowances and how much you can get vary by state, so you’ll need to check the laws in your area.
• Probate advance. A probate or inheritance advance also allows you to access a portion of your inheritance — and you won’t have a monthly payment — but it can be expensive.
• Personal loans. While you’re waiting for your inheritance to come through, getting a personal loan to cover your expenses may be a less expensive option than a probate loan.
• Home equity financing. Homeowners may want to consider applying for a home equity loan or home equity line of credit (HELOC) rather than paying higher rates for an inheritance loan.
• Credit cards. If you apply for a credit card with a 0% introductory rate, you could get interest-free financing for up to 18 months.

A note on taxes

Inheritance advances are generally not considered taxable income. The federal estate tax exemption for 2026 is $15 million per individual, so the vast majority of estates will owe no federal estate tax.

A handful of states — currently Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania — do levy state inheritance taxes. Advance companies typically factor these into their calculations. That said, always consult a tax professional for advice specific to your situation.

Red flags to watch for

Because this industry is lightly regulated, it’s important to vet any company carefully before signing. Watch out for:

• Vague or hidden fees. Reputable companies disclose all costs upfront in writing.
• Pressure to sign quickly. You should have time to review terms carefully.
• No written agreement. Never proceed without a clear, signed contract.
• Guarantees about probate timing. No one can guarantee how long probate will take.
• Unusual clauses. Some contracts include acceleration clauses or penalties if probate runs longer than expected.

Checking a company’s rating with the Better Business Bureau (BBB) and reading verified customer reviews is a reasonable starting point.

Bottom line

Waiting up to two years (or longer) for an estate to clear probate can put real financial pressure on heirs. Inheritance loans and advances both solve that problem, but in different ways and at very different costs.

If you’re considering an inheritance loan, shop around, get full fee disclosures in writing and compare it carefully against personal loans or home equity options first.

Frequently asked questions

• Are inheritance loans a good idea?

  It depends on your situation. If you have urgent financial obligations and don't qualify for lower-cost alternatives like personal loans or home equity financing, an inheritance loan or advance can make sense. If you can wait, you'll almost certainly come out ahead by doing so.

• Can I borrow against a house I inherited?

  Possibly. If the inherited property has substantial equity and no outstanding mortgage (or a small one), a hard money lender may be willing to lend against it. If the property carries a large mortgage and limited equity, you'll likely struggle to qualify.

• Can I get an inheritance loan with bad credit?

  Because inheritance loans come from private hard money lenders rather than traditional banks, your credit score typically carries less weight than the value of the estate. Inheritance advances don't involve credit checks at all — approval is based entirely on your expected inheritance.