The probate court process can take a long time to complete. It is not uncommon for the process to last as long as several years. This means if you are looking to receive an inheritance you may be waiting quite a while which can be an issue if you need the money now for whatever reason. One option you may want to consider is obtaining a probate loan which can help you obtain the funds you need while you are still waiting for the probate process to play out. 

What is a probate loan? 

A relatively new financial innovation, a probate loan is a loan taken out against an expected future inheritance. Just like most loans a probate loan will require monthly payments to the lender which will include interest charges as well as repayment of the principal of the loan. However, since traditional banks tend to avoid making probate loans, a probate lender may be challenging for many to find. Probate loans may also be referred to as inheritance loans or estate loans. 

How long does a probate loan take to process? 

The advantage of a probate loan lies in how long it takes to process which can be significantly faster than the probate court process. It usually takes a few weeks to a couple of months to process a probate loan application. Compared to potentially several years to navigate the probate process, this can help many people receive the benefits of a future inheritance when they really need it. 

How much money can you obtain with a probate loan? 

Each lender will have different policies on how much they will loan to you for a probate loan. You can usually expect anywhere from 25% to 75% of your expected inheritance. Most lenders will take into account how long the probate process is expected to take in determining how much they will lend to you. 

Many lenders have a set maximum loan amount which they are willing to lend to you, rather than a percentage of the expected inheritance. For instance, a particular lender may only provide financing up to $30,000 regardless of the amount you are expecting to inherit. Another lender may have a maximum of $250,000 in financing. Of course, the larger your expected inheritance the closer to the maximum financing amount you are likely to obtain. 

How does the probate loan process work? 

The process for a probate loan is similar to other types of loans. The lender will basically be looking at your ability to and probability you ultimately will repay the loan along with interest charges. This will require the lender to evaluate the expected inheritance which could include the estate’s executor. 

The interest rates on a probate loan are dependent on your particular financial circumstances and will usually range between 7% and 15%. A probate lender may offer a discount on interest charges if probate is completed sooner. 

You may want to consult a personal finance expert if you are considering taking on a probate loan or any other type of loan.