When you’re navigating life after the loss of a beloved relative or close friend, you have enough emotional strife to negotiate. When you have a financial relationship with that person – someone who has left money to you or left assets for you and your fellow heirs to sort out, then the situation becomes even more complex – and stressful. In cases where you have a lot of surprise tasks to handle, such as arranging for a thoughtful funeral, without the proceeds from the estate, which can be tied up for a year – if not more – then an inheritance funding provider can provide real solutions.
In Canada, the average funeral costs between $9,000 and $20,000. If the deceased asked that they only be cremated, that can still cost as much as $5,000. These are not necessarily huge sums of money, but when surprise expenses come at the wrong time, any amount can present a financial crisis.
This is the time when an inheritance advance can be a lifesaver. However, if you sign a contract with the wrong company, you can end up paying an advance fee that is much too large and dealing with customer service that provides way too little. Let’s look at some steps you can take to select the best inheritance funding company for you and your family’s needs.
Research each inheritance advance provider’s reputation. Don’t look at the provider’s own website – instead, look at third-party lender review sites to find out what the larger financial world has to say about each company. Check out such metrics as advance terms, communication, funding speed, and satisfaction review scores.
Review the advance terms carefully. If you submit applications to multiple companies, you are likely to get offers that differ significantly in terms of the amount offered and the final fee. While probate loans often come with interest rates between 7 and 15 per cent, the fees that some inheritance advance companies charge represent an effective interest rate close to or even in excess of 100 per cent. While inheritance advance companies like to say that you should choose their offer because it just involves one single payment instead of periodic payments over time, the price of that convenience can be extremely heavy.
Check out the customer service availability. Now that we are well into the 21st century, every reputable financing company should over support available 24/7, whether via email, live chat or telephone representative – or all three. When you talk to a representative, that person should be ready to answer each of your questions patiently and guide you through the whole process from beginning to end.
Expect transparency about all terms of the advance. Reputable inheritance advance providers will make sure that you know what is coming throughout the whole process. Lenders that do not like to answer questions may well be hiding terms that will be less than favorable to you.
Look for a simple application process. Analyzing an inheritance advance application should not involve any examination of your own financial situation. You should not have to fill out any income verification forms or approve the company pulling your credit report. This is because inheritance advance decisions are made solely on the basis of the estate. How solid is your claim to the amount that you say you are due to receive? What creditors have lined up to take their share of the estate before any heirs can receive their distribution? Are there already disputes in place that could question the validity of the will? These questions will indicate how much risk the inheritance advance provider agrees to take on when they issue you funds against your eventual bequest.
What are the warning signs of a potential scam?
If a potential inheritance advance provider asks you to do any of the following, close your browser, or hang up the phone, and move on to the next company on your list:
- Asks for any sort of up-front payment to start the process. The only payment you should have to make with an inheritance advance is the one that comes out of your distribution from the estate – after the probate settlement is final.
- Asks for your Social Insurance Number or bank account number while you are going through your initial consultation. You do have to go through identity verification as part of the approval process, but asking for this sensitive information is a major red flag.
- Asks for online-only communication. If a potential lender will not talk to you but insists on e-mail or online chat only, this is another sign that, even if the company is aboveboard, customer service may be an issue. Move on to the next company on your list.
Are inheritance advances really worth the high fees?
Remember – with an inheritance advance, you’re selling a potentially large chunk of your inheritance to get another chunk of it in the next few days. If you are in a financial crisis and that infusion of cash will make enough of a difference to make the fee worthwhile, then go ahead and take the advance. If you can qualify for a probate loan (which will have a much lower cost if you compare effective interest rates) or take care of your financial need in a different way, then that might make more sense.
Every financial situation has its own unique features and its own solutions. This is why, at Amansad Financial, we suggest that you set up a consultation with one of our lending solutions experts. Over the years, we have found individually tailored solutions for the lending needs of borrowers all over Canada. Whether you are dealing with the loss of income after the loss of a spouse, or hoping to use the proceeds from the passing of a beloved aunt or grandparent to help fund medical school for your daughter, there are a number of ways that inheritance advances – or other funding solutions – can make the difference. Reach out when you are ready to bring that financial crisis to an end.