In your time of loss, the last thing you need is the worry of how to pay for a loved one’s memorial. That’s why LendingUSA is here for you, right at your point of need. Our online funeral financing and loan assistance program is fast, easy, and affordable for expenses, burials, services, emergencies and more – so you can say goodbye with dignity and grace. If you need to borrow money for a funeral, check your rate today. Offer financing options to help your funeral home. Learn more here.
Arranging a funeral is stressful enough without having to worry about how to pay for it. Unfortunately, funerals can be quite expensive, with the average funeral costing between $7,000-$10,000. For many families, coming up with this amount of money on short notice can be very difficult, especially if you have bad credit.
The good news is that there are options for getting a loan to cover funeral expenses, even if you don’t have the best credit. In this article, we’ll explain everything you need to know about getting a funeral loan with bad credit so you can give your loved one the memorial they deserve.
Overview of Funeral Costs
Before looking at loan options let’s break down the typical costs associated with a funeral
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Basic services fee – This is the fee charged by the funeral home for their basic services related to arranging the funeral and burial or cremation. It includes consulting with the family, sheltering the remains, obtaining required permits, and coordinating with the cemetery. The basic fee is usually around $2,000-$3,000.
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Transfer of remains – The cost to transport the deceased from the place of death to the funeral home. Usually between $300-$500.
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Embalming – Embalming preserves the body for viewing and is usually $500-$700. This may be required if having a viewing.
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Other preparation – This includes dressing, casketing, and cosmetizing the body, costing $250-$400.
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Use of facilities – If you plan to hold a viewing or service at the funeral home, there is usually a fee for using their facilities. Expect to pay $400-$500.
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Funeral vehicle(s) – A hearse to transport the casket is typically $300-$500. A limo for the family may cost $400.
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Casket – Prices range widely from $1,000 for a basic casket to over $10,000 for premium materials. Typical cost is around $2,500.
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Vault – A vault or grave liner is required by most cemeteries to prevent the grave from sinking. The cost is usually $1,000-$1,500.
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Cemetery plot – The cost for the burial plot itself can range from $1,000 for a basic space to over $15,000 for premium plots. Plan on at least $2,000 for a standard space.
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Grave marker – Headstones and grave markers start around $1,000. Large, detailed headstones can be over $3,000.
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Other – Programs, flowers, obituary notices, clergy honorariums, and catering for receptions may amount to several hundred dollars more.
As you can see, even a basic funeral without any frills can easily cost over $7,000. It’s no wonder so many families struggle to cover the costs when a loved one passes away unexpectedly.
Loan Options for Bad Credit Borrowers
If you have bad credit, you may feel like you don’t have many options when it comes to getting approved for a loan. However, there are several possible sources of financing those with less-than-perfect credit can turn to:
Online Lenders
Online lending companies like LendingUSA specialize in bad credit loans. They can often provide funeral financing of up to $12,000, even with credit scores as low as 500.
The application process is simple – you just fill out a short online form and receive an instant decision. Funds can be deposited as soon as the next business day after approval. This makes online lenders a fast and convenient option when you need money quickly to cover funeral costs.
APRs start around 35%, depending on your creditworthiness. While higher than with good credit, this is still much lower than the triple-digit interest rates of payday loans and credit cards. Loan terms are usually 2-7 years.
Home Equity Loan
If you have sufficient equity built up in your home, a home equity loan or line of credit is one way to tap into it for funeral expenses. Because it is secured by your home, interest rates are lower for those with less-than-stellar credit.
You may be able to borrow up to 85% of your home’s value minus what you owe on your mortgage. The application and approval process takes about a month, so this isn’t a quick option but can provide funds at a lower rate.
Credit Union Payday Alternative Loan
Many credit unions offer PALs – Payday Alternative Loans. These short-term loans are designed as an alternative to high-cost payday loans. Loan amounts are usually $200-$1,000 with terms between 1-6 months. Interest rates are capped at 28%.
Membership at the credit union is required to qualify for a PAL. If you already belong to a credit union, this could be an affordable way to borrow a smaller amount for immediate funeral costs.
Credit Card Cash Advance
In a true emergency, a credit card cash advance may help cover immediate expenses like securing funeral home services or transporting remains. However, interest rates are extremely high – often over 25% – and there are usually fees involved too.
This should only be utilized as an absolute last resort option, and other sources of financing should be secured as soon as possible to pay off the credit card balance.
Payment Plan from the Funeral Home
Many funeral homes are willing to arrange a payment plan to cover the costs of services provided to families in need. They understand the high costs involved and that many clients require financing. Terms are usually 3-12 months. Interest may or may not be charged.
This allows you to pay off the funeral home’s charges over time rather than in one lump sum. Keep in mind that any other expenses like the cemetery plot or headstone would need to be covered separately.
Crowdfunding
If approved financing will take too long and covering immediate funeral costs is impossible, crowdfunding sites like GoFundMe allow you to quickly raise money from friends and family. Share details on social media about the costs involved and your financial constraints.
While you likely won’t raise the full amount needed through crowdfunding, every little bit helps ease the burden. Any financing option you pursue can then cover the remaining balance.
How to Improve Your Chances of Approval
When applying for a funeral loan online or through a lender, follow these tips to boost your odds of getting approved:
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Check your credit reports – Mistakes on your credit reports could be needlessly dragging down your score. Dispute any errors with the bureaus.
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Pay down balances – Try to lower credit card balances before applying for a funeral loan. This will improve your credit utilization ratio.
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Avoid new credit applications – Don’t apply for any other new credit ahead of your funeral loan, as too many inquiries will lower your score.
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Ask a family member to co-sign – If you have a family member in good financial standing, see if they are willing to co-sign the loan with you. This provides the lender with another party responsible for repayment if you default.
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Use available assets – Liquidate any stocks, bonds, or other assets you can access quickly to pay for part of the funeral upfront and lower the loan amount needed.
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Offer collateral – Putting up an asset like a vehicle as collateral can encourage lenders to approve your application. Just be aware the item could be repossessed if you fail to repay.
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Provide documentation – Have documents like tax returns, pay stubs, and bank statements ready to supply proof of your income and ability to repay.
While getting approved with bad credit takes some extra effort, know that there are still loan options available to give your loved one the memorial service they deserve during this difficult time.
Alternatives to Loans
If you have very poor credit and do not get approved for a loan, all hope is not lost. Here are some other potential options to cover funeral costs:
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Social Security provides a one-time death benefit of $255. This could be used toward immediate expenses.
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Check if any life insurance policies have payouts that can be used for the funeral.
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See if the deceased made any funeral or cremation arrangements in advance that paid some of the costs.
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Ask the funeral home if they offer free or discounted services for those with financial limitations.
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Veterans may qualify for up to $300 reimbursement for burial expenses from the VA and free burial in a national cemetery.
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Search for any charitable organizations in your area that may assist families with funeral costs.
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If none of the above are viable options, cremation is considerably cheaper than burial. Basic direct cremations often cost less than $1,000.
Losing a loved one is never easy, no matter your financial situation. Just know that there are always solutions available so you can honor their life properly. With a little creativity and effort, you can figure out a way to cover funeral expenses and get the closure your family needs.
What are the different funeral financing options?
There are a few types of financing options for funeral loans. The type of funeral financing that is best for you usually depends on your finances and situation.
There are a few options that cover funeral expenses, such as:
- Preneed policies: A preneed policy is when your deceased loved one has planned for their funeral expenses ahead of time. With this payment option, families have very little to plan, as their loved one has already done the majority of the planning.
- Life insurance: If your loved one has a life insurance policy, this can cover some or all of the funeral expenses. While your funeral home can help you navigate insurance claims, this can be a challenging process.
- Pay-on-Death Account: Similar to a preneed policy or a funeral trust, a pay-on-death account is set up previously by the deceased family member. They then name a beneficiary to handle the finances, allowing the assets to be available without going into probate.
- Crowdfunding: For unexpected losses in particular, crowdfunding or raising money online can help families cover the necessary expenses for their loved one’s services. This is often a last resort for families.
Personal loans are one of the most flexible options that are well suited for many. Let’s take a look at different funeral financing options. . .
#1. LendingUSA
LendingUSA partners with a network of top-rated lenders and merchants to provide funeral financing for customers. You can apply online with LendingUSA to receive pre-approval and discover funeral homes in your area that accept financing. Alternatively, if you are already working with a funeral home, you should ask if they are a LendingUSA partner. If they are, you can apply directly with the funeral home. LendingUSA offers customers promotional financing offers, competitive rates, and a seamless no-hassle experience.
#2. Credit Card
Credit cards may be a convenient option but you should think twice before swiping. While funeral expenses may start as a few hundred dollars here and there, they usually end up totaling thousands of dollars. Most credit cards have high interest rates, which can make the actual funeral cost much higher than it needs to be. In addition, your credit card may not have a high enough balance to cover all the funeral expenses. Credit card holders should be careful using more than 30% of the available credit limit as it may cause a drop in credit score.
#3. Cash
Cash is usually the cheapest way to pay for funeral expenses, but you may not have enough cash on hand. Even if you do have the cash available, you may want to save it for expenses to follow the funeral or other emergencies. If you can qualify for promotional financing and pay the loan balance within the promotional period, it’s basically the same as using cash.
Can you get a loan from a funeral home?
Some funeral homes may offer financing options. However you probably do not want to call around town asking if funeral homes offer financing during an already trying time. We recommend applying online at LendingUSA to get pre-approved for funeral financing. LendingUSA can connect borrowers to local funeral homes that can accept financing. This allows grieving survivors to spend more time grieving and healing. At LendingUSA, we can make funeral financing easy.
Questions to ask your funeral director
As you’re planning for funeral services, it can be overwhelming as you’re trying to work through all of the details. For some families, not asking the right questions can lead to unexpected costs when they receive the final bill. As a result, be sure to ask the following questions when it comes to funeral expenses and the fees you may incur:
- Do you have a copy of a written price list?
- Does your price list break down all of the services and merchandise?
- What do the cash advances include, and what is the cost?
- Do I have to purchase the casket, urn, or vault through your funeral home?
- Is embalming required before burial?
- What types of payment options do you offer?
- Do you have a monthly payment option?
Keep in mind that the more details you have up front, the better you can plan ahead. Plus, you’ll avoid any unexpected surprises when it comes time to pay the bill.
Pros and Cons of funeral loans
As you weigh your payment options for funeral services, it’s important to weigh the pros and cons of funeral loans as a payment option. While there are many factors to consider, here are a few pros and cons of funeral loans to think about:
Do you have 24/7 access?
Funeral service planning happens very quickly, and families often don’t have time to wait for the banks with set business hours. When you are planning services so quickly, it’s important that you understand your budget as soon as possible and have access to get everything you need online, from checking your rate to signing a contract.
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FAQ
What credit score do you need for a funeral loan?
How to borrow money for a funeral?
Can I get a personal loan for funeral expenses if I have bad credit?
The Federal Trade Commission (FTC) offers a checklist you can use to keep track of costs and see how they add up. It’s possible to get a personal loan for funeral expenses—including loans if you have bad credit. Note, however, that these loans come with costs, as any personal loan would.
Are funeral loans a good idea?
Funeral loans, as they are sometimes called, can be used to cover the cost of the service, preparation of the body, burial or cremation, the casket or urn, and related expenses. As with most other personal loans, you’re likely to get a better deal if you have a good credit score.
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.
Will a funeral loan affect my credit score?
You can apply for a funeral loan risk free and it will not affect your FICO credit score. If approved, you will have fast access to the funds. You can then use those funds to pay for the services you want for your loved one. It takes just a few minutes to provide us with your information. Applying for a funeral loan won’t impact your credit score.