Can You Take Out a Loan to Cover Funeral Costs?

Did you know that only 17% of Americans have preplanned and created a source of money for their funeral? Unfortunately, so many others don’t have the luxury of a death benefit or some other form of insurance to take care of a sudden death. This can leave a tremendous financial strain on a family if they don’t have an additional source of money to pay for funeral costs. 

Fortunately, there is still a way for your family to take care of the funeral. You can borrow money from a lender to take care of funeral arrangements and services through a funeral loan. Please continue reading below to learn more about a funeral loan and how it can best help your family. We will cover all you need to know about funeral costs and where you can go to apply for a funeral loan. 

What Are Funeral Loans?

Although many people plan for their funerals well in advance, unfortunate events sometimes take that opportunity away from people. A funeral loan is an emergency loan that you can use to take care of the cost of a funeral.

These loans act like personal loans, but the approval process and time to receive your funds are not as intense or timely as a typical personal loan. In general, all you have to do is verify your source of income before the lender releases your funds. You can then repay the money borrowed over a set amount of months with interest. 

Funeral Costs and Additional Expenses

A funeral costs between $5,000 to $10,000, but this does not consider the cost of any cemetery fees or flowers. Depending on how you want to hold the ceremony or what types of decorations you want at the funeral, you can look at spending close to $15,000 to $20,000 for a funeral. 

Additional funeral-related expenses:

• Use of facilities for the viewing
• Removal and transfer of the deceased to the funeral home
• Casket
• Embalming and body prep
• Hearse
• Additional service fees

If your family decides that it is best to cremate the body, you may be able to save more money. A funeral with cremation instead costs about $6,000 to $9,000, depending on your family’s requests. 

What if I Can’t Afford the Funeral?

There are several options available for you and your family to consider if you cannot pay for the funeral. For example, you can try to speak with the funeral director about your budget to see if there is a way to create a payment plan to pay for the funeral. 

Reduce Services

When you work with a funeral home director, they will give you your funeral package options. You have the right to speak with them about tailoring the package in the best way for you and your finances. Don’t feel guilty for not being able to afford certain services; the funeral home director is well aware of many families’ financial situations. 

Take Out a Funeral Loan

If you need additional funds to take care of the cost of the funeral, you can take out a funeral loan. As mentioned earlier, funeral loans are loans you can use to pay for the expenses of a funeral. Funeral financing rates vary per lender, but before you sign any paperwork and accept the loan, you have the right to review your terms and conditions. 

Advantages of Funeral Loans

If you are interested in obtaining a funeral loan, there are a few advantages you should be aware of. For example, the most significant advantage of funeral loans is how fast you can get an approval. Planning a funeral needs to happen quickly, and depending on the lender you partner with, you may be able to get those funds within one business day. 

Allows You To Pay Over Time

Depending on the agreement between you and your lender, you can pay off your loan over the course of a few months to a couple of years. If you can pay off the loan early, make sure you reach out to the lender to ensure there are no prepayment penalties.

Disadvantages of Funeral Loans

Although there are a few excellent advantages that come with funeral loans, there are a few disadvantages you should consider. For example, if you are not in a good financial position or cannot balance your debt with your monthly obligations, you may not be able to handle the funeral loan debt.

Before applying for any loan, ensure you are ready to take on that debt. Even more so, make sure you can afford to pay it back on time, so it does not negatively affect your credit. 

Credit Score Issues

If you have little to no or bad credit, you may or may not qualify for the loan. Even if a lender approves you for the loan, you may have high-interest rates, which will cost you more than the principal loan amount. As mentioned earlier, make sure you read the terms and conditions of the loan before you sign any documents. 

Get Help With Funeral Financing

Losing a loved one is an already stressful and exhausting situation to go through. Planning the funeral and estimating funeral costs are even more stressful, especially if you lack the funds to take care of the funeral expenses.

To help you get through this tough time, you have the option to use a funeral loan with payment plan options to help alleviate the financial burden. If you are ready to apply for a funeral loan, submit your information today. We are available to answer any questions or concerns about your funeral loan.