In recent years, there has been a growing popularity of inheritance advances in the UK. This is an interesting development, and it is easy to see why more and more people are utilising this service. This post will tell you all you need to know, including the benefits and drawbacks, so that you can determine if this is a suitable alternative funding option.
What is an Inheritance Advance?
So, what exactly is an inheritance allowance? Essentially, this is an agreement where a company provides early access to an expected inheritance in exchange for a fee or share of the estate’s value. This differs from traditional loans as you do not have to repay in monthly repayments, as these are repaid directly from the estate. Additionally, eligibility is based on the estate rather than the borrower’s credit rating.
Why are More People Turning to Inheritance Advances?
There are a few reasons why more people in the UK are turning to inheritance advances. One of the primary reasons is that the probate process is notoriously lengthy and delays are common, which means people often have to wait over a year – this can be a long wait for those who need the cash quickly. Additionally, the rising cost of living means many people need access to money to sustain their lifestyle. On top of these reasons, unexpected costs and lack of access to traditional credit are common reasons for people to use inheritance advances.
Understanding the Costs & Risks Involved
As with any financial product, it is important to understand the costs and risks involved. Providers typically have fees or take a fixed share of the final inheritance, which could be a higher amount than traditional interest rates. This is why you must always read the terms and conditions before signing anything.
How to Qualify for an Inheritance Advance
To qualify for this financial product, you will need to be a named beneficiary of an estate. The size and liquidity of the estate can also be a factor, as lenders tend to prefer larger or more straightforward estates. If you are considering an inheritance advance loan, you will need to make sure that you have the right legal documentation when approaching lenders, such as a will or a grant of probate.
Alternatives to Inheritance Advances & When to Consider Them
There are plenty of alternatives to inheritance advance loans to consider. These include personal loans, credit cards, and borrowing from loved ones. Inheritance advances can be a good option for those without access to credit or those needing funds quickly, but other options could be more cost-effective. This is why you should always research and compare your options.
Inheritance advances are growing in popularity in the UK. They can be a great financial product for many, but you must always understand the exact terms of the agreement first.
