Comparison · Estate Planning · 2026
Probate Loan vs Executor Using Personal Funds UK 2026
Inheritance tax is usually due before probate is granted, but an estate's own bank accounts stay frozen until that grant arrives. Executors bridge this gap either with a specialist probate loan or by advancing their own money. Here is how the two options compare for 2026.
TL;DR - 30-Second Summary
- - Probate loan: short-term finance secured against the estate, repaid once probate completes, carries interest and fees
- - Personal funds: executor advances their own money, no interest, but ties up cash and needs careful record-keeping
- - HMRC's IHT direct payment scheme can also pay tax straight from the deceased's bank/building society accounts in many cases — check before assuming a loan is needed
Who Should Choose What?
Consider a probate loan if...
- - No executor has enough spare cash to cover the tax bill
- - The sum needed is large relative to any executor's personal savings
- - There are multiple executors and informal advances would be hard to track fairly
Consider personal funds if...
- - The amount needed is modest and one executor can comfortably cover it
- - Probate is expected to complete relatively quickly
- - You want to avoid loan interest and arrangement fees entirely
Frequently Asked Questions
Why would an estate need money before probate is granted?
HMRC generally requires any inheritance tax due to be paid before the Grant of Probate or Confirmation is issued, yet the estate's bank accounts and assets are usually frozen until that grant is obtained — creating a cash-flow gap that a probate loan or personal funds can bridge.
What is a probate loan?
A probate loan (also called an estate or executor loan) is short-term finance provided by a specialist lender directly to the estate or to the executor, secured against the estate's assets, used to pay inheritance tax, funeral costs or other expenses before the estate is settled. It is typically repaid in full once probate completes and assets are released or sold.
Can an executor just use their own money instead?
Yes, and many do for smaller amounts — an executor can personally advance funds to the estate and reclaim them once probate is granted and funds become available. This avoids loan interest and fees but ties up the executor's own cash, sometimes for many months, and needs clear record-keeping to justify reimbursement.
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Is it risky for an executor to lend the estate their own money?
It carries some risk. If the estate turns out to have insufficient assets, or there are disputes among beneficiaries, the executor may struggle to be repaid in full or promptly. Executors should keep meticulous records and, for larger sums, consider a formal loan agreement rather than an informal advance.
Which option is faster to arrange?
An executor using personal savings is usually faster since it needs no application or lender underwriting. A probate loan can take days to a few weeks to arrange depending on the lender and how much documentation (will, asset schedule, IHT forms) is already available.
What does a probate loan typically cost?
Costs vary significantly by lender and are usually quoted as a monthly or annual interest rate plus arrangement fees, reflecting the short-term, secured nature of the loan. Because rates differ widely between specialist providers, always compare at least two or three probate finance lenders and check for exit fees before committing — see gov.uk for the official probate process.
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Disclaimer: This is educational information, not legal or financial advice. Probate rules and HMRC's Direct Payment Scheme are explained at gov.uk/valuing-estate-of-someone-who-died. Consult a probate solicitor before committing to any loan or personal advance.
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