Editor's choice: Inheritance Funding probate advances
- Rebates available
- No fees for probate delays
- Bad credit OK
Inheritance funding can help you access inheritance funds before the probate court process is over, which can take six months to several years depending on the complexity of the estate. But this type of financing is designed for emergencies and can get expensive — you could end up paying as much as 50% of your inheritance in fees.
Inheritance funding is a type of short-term financing that gives you access to the value of the funds or assets you’ve inherited before the deceased’s probate case is closed.
There are many terms used to describe inheritance funding: inheritance loans, inheritance advances, estate loans, probate loans or probate advances. But when you boil it down, there are really only two types of inheritance funding:
Neither of these inheritance funding methods consider your credit score when you apply. You won’t find inheritance financing at a traditional lender, like a bank or credit union, either.
Also called probate advances or inheritance cash advances, these are the most common types of inheritance financing.
It’s essentially a cash advance on your expected inheritance amount, based on what you may inherit. It’s similar to a payday loan in that way. Because you’re not actually taking out a loan, you don’t need to worry about repayments or needing strong credit to qualify.
And since it isn’t a loan, there’s no interest. Instead of interest charges, you normally pay a flat fee, which can be quite hefty — around 10% to 50% of the inheritance value.
Sometimes called inheritance loans or probate loans, estate loans allow you to borrow against real estate assets that you don’t yet have access to — it’s like a home equity loan. You receive your funds and repay it plus interest and fees, with your estate considered collateral for the loan.
An inheritance loan or estate loan may come with an interest rate around 8% to 10% or more, and lenders typically lend up to 65% to 70% of the property’s value.
However, not all “estate loans” work this way — sometimes lenders use this term to refer to an advance. Make sure you understand how your lender works before applying.
Find an inheritance funding company by comparing APR, minimum credit score and loan amount. Select the Go to site button for more information about a particular lender.
You can either go with an inheritance finance company or with a hard-money lender. However, be aware that either option can come with high fees or high interest rates.
The most common way to get inheritance financing is through an inheritance advance company. These companies buy your inheritance directly from you in exchange for a fee.
They don’t consider your credit history when you apply, and you can get inheritance upfront, within a few days of applying. But these companies can be expensive, charging fees equivalent to those you’ll find with a high-interest loan.
Hard money lenders are short-term lenders that provide loans backed by property. Like inheritance advance companies, hard money lenders don’t consider your credit score.
This option, too, can be expensive, with APRs often higher than other subprime loans. If you’re unable to repay your loan, your lender seizes your estate assets and sells it.
Inheritances involve two types of taxes: estate tax and inheritance tax. Estate tax is paid from the estate of the deceased before you get your funds. Inheritance tax is what you pay after you receive your inheritance.
Only a few states charge inheritance tax, including Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. This tax can range from 1% to 18% of your inheritance’s worth as of 2022, depending on how much you receive and your state’s laws. Often close relatives like spouses and dependents are exempt from paying an inheritance tax.
Make sure you’re aware of your state’s inheritance tax laws before applying for inheritance financing to know just how much you’re eligible to receive.
Applying for inheritance financing is more involved than other types of loans. There’s a lot you need to do before you can even start looking at lenders. And you’ll need to gather some documentation, such as:
Here are the typical steps in getting advance inheritance funding:
Getting an estate settled can take anywhere from six months to years — but immediate inheritance advances or probate loans could be funded within a few days or within five business days, depending on the lender.
What happens next depends on the type of financing you got. If you got an inheritance advance, there’s little else you need to do if the rights to the inheritance have already been transferred over.
With an estate loan, however, you make monthly repayments until your loan’s principal and interest are paid off. Keep an eye on your loan’s balance and try not to miss any repayments — these loans tend to come with high interest rates that can add up quickly.
There are several legitimate reasons for wanting to get an advance or loan backed by your inheritance, but it has its drawbacks.
Depending on your needs, you might find alternatives that are a lot less expensive than inheritance financing.
Inheritance financing is an expensive option worth treating as a last resort. Before you apply for an inheritance loan, make sure you understand your legal obligations and what your assets are really worth — after taxes as well. If you can afford to wait, then that may be the best route. If the probate ends swifty, you may have paid extra to get those funds instead of just waiting a few extra weeks or months.
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