How a probate loan or inheritance advance works
A probate loan lets a beneficiary or executor borrow against an inheritance before the estate has been paid out. One UK broker says it is secured against the inheritance rather than the borrower's home, that it can typically arrange borrowing for up to 60% of the value of the inheritance, and that it is repaid directly from the estate once probate concludes, with no monthly repayments. The same broker says there is no personal liability for any shortfall, but each agreement is different, so check yours.
Because nothing is paid until the estate settles, the interest and fees build up for as long as probate takes. The calculator adds them up to the date you enter and takes the result off your expected inheritance.
Worked example: a £30,000 advance against a £75,000 inheritance
You expect £75,000 and take an advance of £30,000, which is 40.00% of the inheritance. The provider charges 18% a year, compounded monthly, plus a 2% admin fee of £600 and £500 of legal fees, both added to the amount owed. You receive £30,000.00 now, and £1,100.00 of fees are added to what you owe.
If the estate pays out after 12 months, the amount owed is £37,183.73, which is 49.58% of your inheritance, so you keep £37,816.27. The advance costs £7,183.73, which is 23.95% of the cash you receive, and the effective annual rate is 23.95%. If the estate took 6 months longer you would repay £40,658.29, and if it took 12 months longer £44,457.54.
Monthly rate, simple interest or a flat fee
Choose how your provider charges. A yearly rate is charged monthly at one twelfth of the rate and compounded. A monthly rate compounds every month. Simple interest does not compound. A flat fee is a one-off percentage of the advance, whatever the time taken.
On the same £30,000 and fees, a 1.5% monthly rate over 18 months means £40,658.29 is repaid, which costs £10,658.29, or 35.53% of the cash, and is an effective annual rate of 22.47%. Simple interest at 21% a year for 9 months with no fees repays £34,725.00 and costs £4,725.00, an effective annual rate of 21.53%. A flat fee of 30% of the advance plus a 2% admin fee, with the estate paying in 10 months, repays £39,600.00 and costs £9,600.00, and that works out at 39.54% a year, because the same fee is spread over fewer months.
Fees added to the amount owed or deducted from the cash
Fees added to the amount owed carry interest, which makes them cost more over a long probate. Fees deducted from the advance mean you receive less cash but owe no interest on them. With a 3% admin fee and £450 of legal fees deducted from the £30,000, you receive £28,650.00, the amount owed after 12 months is £35,868.55, and the effective annual rate on the cash you receive is 25.20%.
When the inheritance is less than you owe
Interest builds up whether or not the estate is ready to pay. On a £30,000 advance against a £40,000 inheritance at 24% a year, the amount owed after 48 months is £80,457.89. If the provider takes only what the estate pays, it takes the £40,000 and you keep nothing. If you still owe the difference, the shortfall is £40,457.89 and the advance costs £50,457.89. Choose the option that matches your agreement.
What this estimate leaves out
This is a planning estimate. It does not predict how long probate will take, check what you are entitled to, model different rates for different periods, early repayment or tax. It also does not model the cost of other ways to raise money, such as a bridging loan secured on a property. The figures in your agreement are the ones that count, and a solicitor can advise you before you sign.
To borrow against a property instead, use the bridging loan calculator.
To see how compounding builds up on any loan, use the compound interest loan calculator.
Use the right country page
This page stays in pounds and uses UK terms: probate loan, estate and executor, with the effective annual rate. The country choices above the inputs open separate local pages. Choosing United States opens the inheritance advance calculator, which uses dollars, probate funding terms and a simple annualised rate. The inputs reset and amounts are not converted.
Inputs for the inheritance loan calculator
How the provider charges
A yearly or monthly rate compounded monthly, simple interest, or a one-off fee on the advance.
Admin and other fees are
Whether fees are added to the amount owed or deducted from the cash you receive.
If the inheritance is less than owed
Whether the provider takes only what the estate pays, or you still owe the difference.
Your expected inheritance
The amount you expect to receive when the estate is paid out.
Advance you want
The amount the provider pays you. It cannot be more than your expected inheritance.
Months until probate completes
How long the advance is outstanding. A longer wait costs more.
Interest rate or fee
The rate in your quote, read as chosen above: per year, per month or one-off.
Admin fee and legal and other fees
An admin fee as a percentage of the advance, plus fixed legal or valuation costs.
CALCULATOR QUESTIONS
UK inheritance loan calculator questions
How do you calculate the cost of a probate loan?
Add up the interest and fees to the date the estate pays. £31,100 at 18% a year compounded monthly for 12 months is £37,183.73 owed, which costs £7,183.73.
How much of the inheritance does the lender take?
In the worked example the amount owed is £37,183.73, which is 49.58% of the £75,000 inheritance, so you keep £37,816.27.
What if probate takes longer?
The cost grows with every month. The example repays £37,183.73 after 12 months, £40,658.29 after 18 months and £44,457.54 after 24 months.
Do I make monthly repayments on a probate loan?
One UK broker says there are none, because the loan is repaid directly from the estate once probate concludes. The interest builds up in the meantime.
Do I owe anything if the inheritance is not enough?
It depends on the agreement. Choose whether the provider takes only what the estate pays or you still owe the difference. In the example the shortfall would be £40,457.89.
What happens if I change country?
The United States option opens the separate inheritance advance calculator, in dollars, with probate funding terms and a simple annualised rate. Your inputs are reset rather than converted.