Executing a will can take anything from three months to several years, depending on the complexity of the estate and the number of claims made upon it. But heirs don’t necessarily have to wait for their inheritance; a probate cash advance can often be obtained. This is a special kind of inheritance loan that can be obtained even by individuals with bad credit or no employment, provided they can prove their entitlement to a portion of the decedent’s estate.
Probate cash advances are not like standard loans. When borrowing from a normal lender a borrower receives a lump sum of cash in return for an annual interest rate and monthly payments. The loan is usually for a fixed term and will cost more the longer it takes to pay off.
When receiving an inheritance advance, an heir is receiving an advance on money that they are already entitled to. As such, there are no monthly interest rates and no standard APR. The inheritance lender will usually charge a flat fee for an inheritance loan and collect it when the money is finally released from probate.
Credit Checks for Inheritance Advance
Most lenders will run background credit and criminal checks, but poor credit or lack of employment does not usually affect an heir’s ability to receive an inheritance advance. The checks are made to ascertain whether any other parties have claims to the inheritance money; for example, if the heir is and undisclosed bankrupt then they may not be entitled to receive any of the inheritance at all.
As long as the heir can prove they are entitled to receive the cash, bad credit in itself does not constitute a risk and so does not preclude an inheritance loan. For a normal loan, bad credit might indicate that an individual would be unable to repay a loan in the future, but in the case of a probate cash advance, the heir effectively has the money already.
Inheritance Cash Advance Fees
However, while bad credit is not a risk, there remains a possibility that the heir will not receive their full inheritance. If there are insufficient funds released from an inheritance to cover the amount of an inheritance advance then it is the lending company that must absorb the loss. For this reason, the maximum inheritance loan that an heir can receive is generally around 30% of their entitlement.
The lending company will also generally charge around 20-25% of the advanced amount for the surface. This is a flat fee, so when applying for an inheritance advance it is important to consider not only the cost but the time it would otherwise take for the inheritance to be received. 25% on an advance for three months is equivalent to an APR of 144%. 25% on an advance for three years is equivalent to an APR of 7.7%.
Because of the relatively low risk and high reward for inheritance lending there are many unscrupulous companies only too eager to offer inheritance loans – shopping around for the best fees is crucial and can make a big difference in the amount you receive.
A probate cash advance is a way of getting a fast cash injection in the event of inheritance, where the probate process is set to take several months or even years. Inheritance loans are relatively low risk for the lending companies and so are available to individuals with no employment or bad credit. However, an inheritance advance can be expensive, particularly if probate is resolved quickly, so the decision to take probate cash should be given careful consideration.