Probate can be expensive. Many of us live in families with intertwined finances. The probate process cannot just keep you from getting an inheritance but can interrupt your daily finances. That is why many people look at probate advances. Probate loans are bank loans that are secured by your inheritance but based on your qualifications as a borrower. Probate advances work differently. They are secured by the inheritance and the estate, which means that they may be an option even if you would not qualify for a bank loan.
Pros and Cons of Probate Loans
Probate loans can be a good way to handle things while an estate gets settled. However, they are not great for every situation. On the plus side, if you have good credit, you will probably be able to get a probate loan. Furthermore, the probate loan may not depend on the strength of the claim to the estate assets.
However, there are more cons than pros to probate loans. First, you will have to pay interest on the loan and monthly payments until the estate is probated. If the probated amount is insufficient to cover the amount you borrow, you are responsible for the difference. You may not qualify for a probate loan unless you have sufficient income and good credit.
Pros and Cons of Probate Advances
You can get probate advances even if you cannot qualify for a probate loan. You do not have to provide your earnings, credit history, or employment history to qualify for a probate advance. That is because a probate advance is not a loan. Instead, it is the sale of your portion of an estate while it is still in probate. It could mean that you get less money than you would if you waited until the estate was probated. However, it gives you access to funds that you need quickly.
Which One Is Right for You?
How do you know whether a probate loan or a probate advance is right for you? It depends on your individual circumstances. Do you have the money to make payments on the advance until the estate is probated? Do you have the credit score and income to qualify for a loan? If so, then a probate loan might be the right choice. However, if the estate consists of assets that could lose their value, getting a probate advance lets you take advantage of the increased value of the estate loans.