Probate loans solve a real timing problem: probate in England and Wales often takes nine to twelve months, yet Inheritance Tax, funeral costs and property bills fall due before the estate can be touched. The catch is that a loan is usually the most expensive way to bridge that gap, and executors in particular can often use HMRC's own free Direct Payment Scheme or pay the tax in instalments instead.
This guide sets out the types of probate loan, what they cost in practice with a worked example, whether they are regulated, and the cheaper routes most lender pages leave out. Figures are current as at August 2026 and are subject to change.
What is a probate loan, and how does it work?
A probate loan is finance advanced against an estate that is going through probate, letting an executor or beneficiary reach funds locked in the estate before the grant of representation is issued. It is normally secured against the estate or the expected inheritance, carries interest that rolls up rather than monthly payments, and is repaid in a single lump sum once the estate is settled.
The reason the money is locked up is timing. A grant is usually issued about 8 to 16 weeks after a complete application, and a full estate often takes around nine to twelve months to settle (gov.uk, applying for probate, as at August 2026, subject to change). Until then, banks and registrars will not release most assets. Our guide to what probate is and when it is needed explains that threshold.
The same product goes by several names: inheritance loan, estate loan, executor loan or inheritance advance. They are secured against estate assets, not your personal ones, so they do not usually need a personal guarantee, proof of income or regular repayments. That convenience is priced in, which is why the cost matters more than the speed.
What types of probate loan are there?
Probate finance is not a single product. The three main forms differ by who borrows, what secures the money and how it is repaid, and one of them is not really a loan at all. Matching the right type to the situation is what keeps the cost down.
| Type | Who takes it | Secured against | Repayment |
|---|---|---|---|
| Inheritance advance | A beneficiary | The beneficiary's share of the estate | Repaid from the estate, no monthly payments; some are a purchase of part of the inheritance at a discount rather than an interest-bearing loan |
| Executor loan | The executor or administrator | The estate's assets | Repaid from the estate once the grant is issued and assets are collected |
| Probate bridging loan | Executor or beneficiary | A property in the estate, by a legal charge | Repaid when the property sells or the estate settles, interest usually rolled up |
Based on UK probate lenders' published terms, as at August 2026, subject to change. An inheritance advance and a probate loan are often confused: an advance may be a sale of part of your inheritance for a fixed discount, with no interest and nothing more to pay, while a loan charges interest that grows the longer probate runs. Read the paperwork to see which one you are actually signing.
How much can you borrow, and what does a probate loan cost?
Most probate lenders advance up to around 50% to 60% of the expected inheritance or estate value, with funds released in a few days to two weeks. The cost is the catch. Interest is commonly charged at roughly 1.25% to 2% a month and rolled up, plus an arrangement fee of about 1% to 2%, so a loan left outstanding for a year can take a large slice of what you borrowed.
Because interest compounds and rolls up, the bill scales with how long probate takes, which is the part borrowers most often underestimate. The table below works a £50,000 advance at 2% a month with a 2% arrangement fee, showing why a six-month delay and a twelve-month delay are not close.
| Time outstanding | Rolled-up interest at 2% a month | Arrangement fee | Approx. total to repay |
|---|---|---|---|
| 6 months | About £6,300 | £1,000 | About £57,300 |
| 12 months | About £13,400 | £1,000 | About £64,400 |
Illustrative only, based on a £50,000 loan at 2% compound monthly interest plus a 2% arrangement fee. Actual rates, fees and terms vary by lender and estate, as at August 2026, subject to change. This is general information, not financial advice.
On these figures, waiting a year turns a £50,000 loan into roughly £64,400 repaid, about £14,400 more than you borrowed. That cost comes out of the estate, so it reduces what every beneficiary eventually receives, not just the person who borrowed.
Can you get a loan to pay Inheritance Tax before probate?
Yes. An executor loan can cover an Inheritance Tax bill, which HMRC generally requires to be paid by the end of the sixth month after death, before the grant is issued. That creates a well-known catch: you need the grant to reach the estate's money, but you often need to pay the tax to get the grant.
Inheritance Tax is charged at 40% on the value of an estate above the £325,000 nil-rate band, or 36% where at least 10% of the net estate passes to charity (gov.uk, Inheritance Tax, as at August 2026, subject to change). A residence nil-rate band of up to £175,000 can apply where a home passes to direct descendants, and these bands are frozen until 5 April 2031. Our guides to inheritance tax and how inheritance tax is calculated set out how the bands combine.
An executor loan closes the timing gap without touching your own funds, and it can prevent a forced sale of property at a poor price. Before borrowing, though, it is worth checking two routes that usually cost far less.
Cheaper routes to pay IHT before probate
Before taking a loan to pay Inheritance Tax, executors can often use two HMRC routes that cost much less. Banks can pay the tax straight from the deceased's own accounts, and a large part of the bill on property or a business can be spread over ten years. Lender pages tend to skip these, because they compete with the product being sold.
The Direct Payment Scheme. HMRC's Direct Payment Scheme lets banks, building societies and NS&I transfer money straight from the deceased's accounts to HMRC to settle Inheritance Tax before probate, using form IHT423, with a separate request for each account (gov.uk, pay Inheritance Tax from the deceased's bank account, as at August 2026, subject to change). If the estate holds enough cash, this costs nothing beyond the tax itself.
Paying in instalments. Inheritance Tax on land and property, a controlling shareholding, and some unlisted shares or business assets can be paid in ten equal annual instalments rather than one lump sum (gov.uk, pay Inheritance Tax in yearly instalments, as at August 2026, subject to change). The first instalment is still due by the end of the sixth month after death, and HMRC charges interest on the outstanding balance, but it eases the immediate demand on a property-rich, cash-poor estate.
A grant on credit. Where an estate genuinely cannot raise the tax by any of these means, HMRC may, in limited cases, allow a grant on credit so probate can proceed and the tax is paid from the estate afterwards (gov.uk, applying for a grant on credit, as at August 2026, subject to change). A probate loan is worth pricing against these routes, not instead of them.
Are probate loans regulated, and what should you weigh up?
Many probate loans and inheritance advances are not regulated by the Financial Conduct Authority, because lending to an estate or an executor is often treated as commercial rather than consumer credit. That can mean fewer protections and no automatic route to the Financial Ombudsman Service, so the terms of the agreement carry more weight than usual.
A few points are worth checking before signing. The cost grows with every month probate runs, and delays are common, so an optimistic timeline can be expensive. If the estate turns out to be worth less than expected, the terms decide who absorbs the shortfall: some inheritance advances are non-recourse, while some loans are not.
The cost also falls on the whole estate, reducing every beneficiary's share, and an executor who borrows in their own name may take on personal liability. Because a personal representative can be answerable for how the estate is handled, many people take advice before borrowing against one. Our note on the probate process and how long it takes gives a sense of the timeline you are financing.
How do you apply for a probate loan?
Applying for a probate loan is quicker than a standard loan because the estate, not your income, is what is assessed. The process runs in a set order, and having the estate valuation ready is what speeds it up. The five steps below cover valuing the estate through to repayment from it.
- Value the estate. Pull together an estimate of the estate's assets and debts, and the will if there is one. Lenders assess the expected inheritance or estate value, so this valuation drives how much you can borrow.
- Approach a specialist lender. Most mainstream banks do not offer probate loans, so this usually means a specialist finance provider or broker. Compare the monthly interest rate, the arrangement fee and whether the loan is regulated.
- The lender assesses the estate. The provider reviews the estate's value, the assets securing the loan and any Inheritance Tax due, rather than running a personal credit or income check.
- Accept the offer and secure the loan. You receive terms setting out the amount, the rolled-up interest and the fee, and the loan is secured against the estate or the expected inheritance. Funds are often released within days.
- Repay from the estate. Once the grant is issued and assets are collected, the loan and accrued interest are repaid in a single lump sum from the estate before the residue is distributed.