Loans for Funeral Expenses

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Funeral Financing

Loans for Funeral Costs

Dealing with the death of someone close to you is always difficult, but it’s even more of a struggle when their estate isn’t large enough to cover the costs of the funeral. When a death is sudden or a funeral is unplanned, your best next step is often to acquire a funeral loan.

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What is a funeral loan?

A funeral loan is a loan you can get to cover the costs associated with the funeral or memorial of a loved one. In most cases, this loan will be in the form of a personal loan, though there are other options available which we’ll discuss shortly.

How does funeral financing work?

A funeral loan is usually a lump sum you borrow from a lender which you then pay off, plus interest, in the following months or years. If you use a personal loan, the lump sum will be deposited in your bank account for you to spend as you see fit. Other funeral loans are paid directly to the funeral home.

When should I apply for a funeral loan?

A funeral loan is a good choice when a death is sudden or the deceased’s estate has not put any money aside for a funeral. Funerals can be expensive, depending on what you choose to do, and can be a big financial strain at such short notice. A funeral loan will help lighten the burden.

What is the average cost of a funeral?

he average cost of a funeral can vary significantly depending on several factors, including the location, specific services chosen, and personal preferences. However, to provide a general idea, in the United States, the average cost of a funeral can range from $7,000 to $12,000 or more. This estimate typically includes expenses such as:

  1. Funeral home services (basic services fee, embalming, preparation of the body)
  2. Viewing or visitation
  3. Funeral ceremony or memorial service
  4. Casket or urn
  5. Burial plot or cremation fees
  6. Headstone or grave marker
  7. Transportation (hearse, limousine)
  8. Floral arrangements
  9. Printed materials (such as programs or memorial cards)
  10. Administrative and legal fees (permits, death certificates)

Funeral Pricing Checklist

The FTC has an excellent pricing checklist you can use to compare funeral home expenses. We've consolidated this document into a print ready format. Be sure to make multiple copies of this document to compare costs while you are performing your research

Click here to download FTC pricing checklist (Print ready PDF document)

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How can I reduce the costs of a funeral?

There are several ways to reduce the costs of a funeral while still honoring your loved one. Consider the following suggestions:

  1. Shop around: Funeral costs can vary among different funeral homes or service providers. Take the time to research and compare prices from multiple providers in your area to find the most affordable options that meet your needs.
  2. Choose cremation: Cremation tends to be less expensive than traditional burial. Consider opting for cremation instead of a full burial if it aligns with your personal preferences and cultural or religious beliefs.
  3. Simple casket or urn: Select a basic or less expensive casket or urn. Funeral homes are required to provide you with a price list, allowing you to compare the costs of various options.
  4. Skip embalming: Embalming is not always necessary, especially if you're opting for a closed-casket funeral or immediate burial or cremation. Skipping embalming can help save costs.
  5. Consider a memorial service or home funeral: Instead of holding a traditional funeral ceremony at a funeral home, you could choose to have a memorial service at a different location, such as a family home or community center. This can help reduce venue costs.
  6. DIY elements: Consider handling some aspects of the funeral arrangements yourself, such as creating homemade memorial cards or flower arrangements. This can help cut costs while adding a personal touch.
  7. Limit extras and add-ons: Be mindful of optional services or add-ons that can increase costs. Determine which elements are most important to you and focus on those while minimizing unnecessary expenses.
  8. Look into financial assistance: Depending on your circumstances, you may be eligible for financial assistance or support through government programs, non-profit organizations, or burial assistance programs. Research local resources or reach out to social service agencies for guidance.

What are the pros and cons of funeral loans?

PROS

  • You don’t need to use up your savings: You can spread the cost of the funeral instead of depleting your savings
  • Fast and easy to get financing: Once you’ve chosen a lender, the application process usually takes less than 10 minutes and the money is usually in your bank account or paid to the funeral home within a few days.
  • Fixed monthly payments: Most forms of funeral loan come with fixed monthly payment, so you’ll be able to work it into your budget and not worry about actively paying it off unless you want to pay it off early
  • Most don’t have early repayment fees: Provided you read the terms and avoid a loan that charges a fee for repaying it early, you could pay it off in a few months if your loved one owned property you can sell after the funeral
  • Improve credit score: Paying a regular loan payment on time every month will help build positive credit history

CONS

  • They aren’t easy for everyone to access: if you have poor credit, you may find it difficult to secure your loan
  • You may overborrow: choosing to borrow too much can result in higher costs and more difficulty in getting debt free
  • You may still be paying off the funeral in a few years: which can make it difficult to move on or heal emotionally
  • You need them quickly: which leads many to make decisions they wouldn’t have chosen if they’d been in a better place

What are the different types of funeral loans?

  • Personal loans: Personal loans are a common type of funeral loan. They are typically unsecured loans, meaning they don't require collateral. You can borrow a specific amount of money and repay it over a fixed period with interest. The terms and interest rates vary depending on the lender and your creditworthiness.
  • Funeral installment plans: Some funeral homes or service providers offer installment plans specifically designed for funeral expenses. These plans allow you to spread out the cost of the funeral over time with fixed monthly payments. It's important to inquire about any interest or additional fees associated with these plans.
  • Funeral financing companies: There are specialized financing companies that focus on providing loans or credit options specifically for funeral expenses. These companies understand the unique financial needs associated with funerals and may offer flexible repayment terms or tailored loan options.
  • Credit cards: In some cases, individuals may use credit cards to cover funeral expenses. This option can provide immediate access to funds, but it's important to carefully consider the interest rates, repayment terms, and potential impact on your credit utilization and credit score.

How much should I borrow for a funeral?

When determining how much to borrow for a funeral, consider estimating the funeral expenses, reviewing available funds, assessing your budget and repayment ability, and including a contingency buffer. Aim to borrow an amount that covers the anticipated expenses while being manageable for repayment. Consulting with professionals can provide additional guidance.

Can you pay for a funeral in installments?

Yes, it is often possible to pay for a funeral in installments. Many funeral homes and service providers offer installment plans to help ease the financial burden for families. With an installment plan, you can spread out the cost of the funeral over a period of time, typically through monthly payments. The specific terms and conditions of the installment plan can vary depending on the funeral home or service provider

What is the best way to pay for funeral expenses?

The best way to pay for funeral expenses depends on your financial situation and personal preferences. Here are some common methods for covering funeral costs:

  1. Personal savings: If you have sufficient savings set aside, using your own funds can be a straightforward and cost-effective way to pay for funeral expenses. It avoids the need to take on debt or navigate payment plans.
  2. Funeral insurance: Funeral insurance policies specifically cover funeral expenses. These policies provide a payout to cover the costs when a policyholder passes away. It's important to review the terms and coverage limits of the insurance policy before purchasing to ensure it meets your needs.
  3. Prepaid funeral plans: Prepaid funeral plans allow you to pay for your own funeral in advance. You can choose the services and products you desire, and the funds are held in trust or invested until they are needed. It's crucial to research and select reputable providers and carefully review the terms and conditions of the prepaid plan.
  4. Funeral assistance programs: Some government agencies, non-profit organizations, or community groups offer financial assistance or grants to individuals or families who are unable to afford funeral expenses. Research local resources or inquire with social service agencies to explore any available programs.
  5. Family and community support: In some cases, family members, friends, or the local community may come together to provide financial assistance or support during difficult times. This can help alleviate some of the financial burden associated with funeral expenses.
  6. Funeral loans or installment plans: Funeral loans or installment plans are options to consider if you need financial assistance. These involve borrowing money to cover funeral costs and repaying it over time with interest. It's important to compare terms, interest rates, and repayment options before selecting a loan or payment plan.

How to apply for funeral financing

To apply for funeral financing:

  1. Research and compare lenders offering funeral loans.
  2. Gather necessary documents such as identification and proof of income.
  3. Complete the application form with accurate information.
  4. Submit the application along with required documents.
  5. Await a decision from the lender.
  6. If approved, receive funds to cover the funeral expenses.

Remember to carefully review the terms and conditions of the financing agreement before accepting the funds.

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