How to Get an Inheritance Loan in 5 Steps – If you’re one of the lucky few who are getting an inheritance from your parents, grandparents, or other relatives, you might be wondering if you can get an inheritance loan to use that money to start your business or grow your existing business with minimal startup costs. Here’s how to do it in five steps.
1) Decide if You Can Use the Money Now
You can apply for a loan at the bank or credit union. You will need your parent’s death certificate, identification, social security card, and other items that show how much you stand to inherit.
The interest rates on these loans are high because they are secured by an asset. If you need the money now, you may want to borrow from friends or family instead.
Your inheritance is not available until probate is complete and that can take six months or more. In order for your loan application to be approved, the bank will need a strong assurance of repayment.
2) Determine the Value of the Estate
The first step is determining the value of the estate. The executor needs to make a list of everything that they believe will be included in the final inventory. This includes:
-All bank accounts,
-Credit card statements,
-Investments, stocks, bonds, and other securities.
-Property not used as security for mortgages or loans (i.e., a house),
-Retirement accounts such as IRAs and 401(k)s,
-The home’s equity is less what was borrowed on it when you bought it (otherwise known as home equity), and finally
-Cash on hand. -Jewelry, artwork, antiques, and other collectibles.
-Watches, coins, and stamps.
-Tools from the deceased’s trade or hobby.
-Vehicles with high mileage that may have little resale value.
Determine Who is Eligible to Receive an Inheritance: To receive money from an inheritance account, someone must qualify as a beneficiary or heir according to your state’s laws.
For example, in California, there are two types of heirs–general beneficiaries and special beneficiaries–and the person receiving assets must meet one type but not both types of requirements to receive assets from the account.
3) Check your Lender’s Requirements
In order to get approved for an inheritance loan you must meet the following requirements:
1. You must be the executor of the estate and have a death certificate
2. You must have the power of attorney
3. You must show proof of ownership for all assets that are worth more than $5,000 on the date of death
4. You can’t use the loan money to purchase a home or pay off existing debts (unless it’s a mortgage on your principal residence)
5. Proof that you have access to liquid assets equal to or greater than your monthly debt obligation (including the loan amount)
6. An Applicant Must be 18 years old
7. Must not have any felony convictions
8. Proof of income – If you’re self-employed, provide a tax return from the previous year. If you’re unemployed, provide two most recent pay stubs from your last job. If you’re retired, provide Social Security Income information
9. Provide contact information for at least three references – include family members or friends who know about how well you handle finances and who would be willing to attest to this fact
10. A statement explaining why this inheritance is needed
4) Negotiate Terms with Lender’s Representatives
1. Decide on the amount of inheritance you want to use for the loan.
2. Contact a lender and let them know how much you would like to borrow and for what period of time (2 years, 3 years, etc.).
3. Once the terms have been agreed upon, sign a contract with the lender and wait until they send out a check for your inheritance as well as information about how much needs to be paid back each month.
4. If it doesn’t make sense for you financially, don’t take out a loan! You can always decide not to take one out but it is easier said than done if you do need one later on down the road.
5. In order to apply for an inheritance loan, follow these steps below:
-Download the form from the lender’s website or call the customer service department
-Complete the application form by providing personal details including full name, contact number, and bank account details
-Include copies of all identification documents such as driver’s license, credit card statement, or recent utility bill
-Signature will also need to be included on the form
-Get a photocopy of all identification documents so that you have copies when applying for the loan
5) Sign the Contract and Receive Funds
The first step of applying for an inheritance loan is signing the contract and receiving funds.
The second step of applying for an inheritance loan is submitting the necessary documents, such as bank statements, income tax returns, and a letter of explanation.
The third step of applying for an inheritance loan is verifying your identity through a copy of your passport or driver’s license.
The fourth step of applying for an inheritance loan is setting up a meeting with the lender to go over the final details and sign the contract.
The fifth and final step of applying for an inheritance loan is waiting until you get word that you have been approved.
