Losing a loved one is hard enough without worrying about how you’ll pay for a funeral. If you don’t have enough savings to pay your loved one’s burial expenses out of pocket, funeral loans can help you cover the upfront costs while you pay them back over time. However, there is a lot to consider before you commit to financing a funeral.
Losing a loved one is one of the most difficult experiences in life. On top of the emotional turmoil the financial burden of funeral expenses can be overwhelming. The average cost of a funeral in the U.S. is around $7640, and that doesn’t even include cemetery costs. For many families, coming up with such a large sum so suddenly is nearly impossible. Thankfully, there are options for financing funeral costs that provide some relief during this trying time. In this article, we’ll explore funeral loans and how to find the best ones near you.
Why Funeral Loans Can Help
Funeral loans provide funds that can cover various end-of-life expenses all in one place. Here are some of the biggest benefits of using a funeral loan:
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Consolidates Costs With a funeral loan you can bundle together items like the casket funeral services, burial plot, headstone, flowers, obituary notices, travel for relatives, and more into one single loan. This simplifies the financing process tremendously.
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Spreads Out Payments Rather than paying the full amount upfront, a funeral loan allows you to make regular monthly payments over time, usually 2-7 years. This makes the costs much more manageable.
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Fast Access to Funds: Funeral loans can provide you with funds in as little as 1 day in some cases. This rapid financing ensures you can cover time-sensitive expenses right away.
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Flexible Use of Funds: Money from a funeral loan can be used for any memorial-related costs without restrictions. You don’t have to itemize expenses.
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May Offer Lower Rates Than Credit Cards: While credit cards are an option, the higher interest rates can end up costing much more over time compared to a personal loan.
What to Look for in Funeral Loan Lenders
If you decide a funeral loan is right for you, the next step is finding a lender that offers the best loan terms and service. Here are some key factors to evaluate:
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Interest Rates and Fees: Pay attention to both the interest rate and any origination fees charged. Lower is better to minimize the overall cost.
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Loan Amounts: Make sure the lender provides loan amounts high enough to cover your expected funeral costs. Many offer loans up to $50,000 or more.
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Loan Term Length: Longer terms of 5-7 years have lower monthly payments but higher total interest paid over the life of the loan. Opt for the shortest term you can afford.
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Funding Speed: Same day or next business day funding ensures you get the money when you need it most.
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Credit Score Requirements: Each lender will have minimum score requirements. Those with lower requirements provide more options for borrowers.
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Reputation and Reviews: Read third-party reviews to gauge customer satisfaction before choosing a lender. High ratings are a good sign.
Where to Find Funeral Loan Lenders
Now that you know what makes a good funeral loan provider, here are some places to look for top financing options near you:
Funeral Homes
Many local funeral homes offer in-house financing or payment plans to cover their services. This can be an easy option, but interest rates may be higher than other sources.
Banks and Credit Unions
Local banks and credit unions may provide personal loans to qualifying borrowers that can be used for funeral costs. Rates and terms vary.
Online Lenders
Online lenders like Prosper and Acorn Finance allow you to easily compare many lenders at once. They often offer the best rates and fastest funding.
Crowdfunding Sites
If approved financing options still fall short, crowdfunding sites like GoFundMe let you request donations from family, friends, and your community.
What Information Lenders Require
When applying for a funeral loan, there is certain information you need to provide. Having these items ready makes the loan process faster and simpler:
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Basic Personal Information: Your full name, date of birth, Social Security number, contact details, and address.
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Income Documentation: Pay stubs or tax returns showing your regular income. Retirement account statements also work.
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Identity Verification: Valid government-issued ID, like a driver’s license or passport.
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Credit History: Most lenders will check your credit reports and score to assess your creditworthiness.
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Funeral Expense Estimates: Total expected funeral costs based on price quotes from service providers.
Alternatives to Funeral Loans
If you find funeral loan options don’t work for your situation, here are a few other ways to pay for funeral costs:
- Life insurance payouts
- Social Security survivor benefits
- Veteran funeral benefits if applicable
- Assistance from religious organizations
- Help from community non-profits
- Fundraising campaigns
The key is exploring all your options, from funeral loans to other financing methods. Don’t hesitate to ask lenders, community groups, religious centers, and non-profits about possible assistance programs. Every little bit helps reduce the burden during an already devastating time.
Finding the Best Funeral Loan for Your Needs
Losing someone you love is painful enough without adding financial stress. With the right funeral loan, you can ensure your loved one is honored as you would like while having an affordable way to pay over time. By shopping lenders and evaluating your options using the criteria above, you can find the perfect funeral loan to meet your needs from the many reputable providers available near you.
What are funeral loans?
At its core, a funeral loan is a personal loan that’s used to cover burial expenses. The funds from these loans can be used to cover the costs of funeral home services, burial and cremation or any other expenses you may incur while putting a loved one to rest.
Like all installment loans, the funds from a funeral loan will be delivered to you in one lump-sum payment. You can then use those funds to cover your loved one’s funeral expenses as you see fit. Then, when your repayment period begins, you’ll repay what you’ve borrowed over a series of regular monthly payments.
Although there are sometimes fees associated with taking out a personal loan, the interest rates are typically more affordable than if you were to charge the same amount on a credit card. Many lenders even offer quick loans that allow you to get same- or next-day funding, if needed.
Should you take out a loan to cover funeral costs?
Like any financial decision, taking out a loan for funeral expenses has its pros and cons. Here’s more information on what to consider as you weigh your options:
| Pros | Cons |
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Provides access to necessary funds: If you can’t afford to pay for funeral costs out of your savings or emergency fund, taking out a loan to cover the cost can help you access the money you need quickly. May help improve your credit score: If you can keep up with your monthly payments, paying back an installment loan can actually help you improve your credit score over time. Can reduce stress: Planning a funeral is stressful in its own right, but applying for a loan can help you stop worrying about where the money is coming from. |
Creates more debt: Taking on more debt can have potentially negative consequences if you’re unable to keep up with your payments, including causing your credit score to drop. May involve paying high interest rates: While bad credit loans do exist, you may be subject to higher interest rates if you have a lower score. Encourages sole responsibility: Unless you apply with a co-borrower, taking out a personal loan leaves you solely responsible for paying it back. If your circle is large enough, it may be worth looking into alternative options, like crowdfunding, where you can share the cost burden. |
How to Pay for a Loved One’s Funeral Without Using Your Own Money
FAQ
What credit score do you need for a funeral loan?
How do funeral loans work?
What happens when you can’t afford a funeral?
How much would you like to finance a funeral?
How much would you like to finance? A funeral loan is an unsecured personal loan that is paid back in equal monthly installments. While loan terms may vary, a funeral loan allows borrowers to spread out the cost of their funeral expenses over time – generally 2 to 7 years – making funeral costs more manageable.
How do I find a funeral home that offers lendingusa?
If you have yet to find a funeral home for your loved one’s services, you can use our merchant search tool to find a funeral home in your area that offers LendingUSA as an option. If you’ve discussed financing your funeral services with the funeral home already, you can select the funeral home as you fill out your application.
What is a funeral loan?
What are funeral loans? At its core, a funeral loan is a personal loan that’s used to cover burial expenses. The funds from these loans can be used to cover the costs of funeral home services, burial and cremation or any other expenses you may incur while putting a loved one to rest.
Can a personal loan be used for a funeral?
The funds received from a personal loan (which are given as a lump sum) are generally unregulated and can be used for any costs associated with a funeral and burial including a memorial service, casket, or family members’ travel expenses.