Funeral Loans: Compare Options and Learn More

When a loved one passes, the last thing you should worry about is how you’ll pay for their service. Personal loans can help cover funeral and burial expenses, and we’ve researched several options that offer quick applications and fast funding. Read on for our recommendations.

Table of Contents

1. Best funeral loans
   1. Credible
   2. Upgrade
   3. SoFi
2. Repayment
3. Pros and cons of using a personal loan
4. FAQ

Best funeral loans

When we talk about funeral loans, we mean using personal loans to pay for funeral expenses. Personal loans are quick and versatile. You could receive your funds as soon as the same day, at which point you can spend your proceeds as you see fit. 

We recommend these top-rated lenders if you’re considering a personal loan to cover funeral costs.

Credible

Upgrade

SoFi

What does repayment of burial or funeral loans look like?

Repaying funeral loans is similar to repaying other installment loans: You’ll make fixed payments each month until your balance is paid in full. How much and how long you pay depends in part on how much you borrow.

In 2023, the National Funeral Directors Association reported that typical funeral and burial costs ranged from $7,848 to $8,300. Cremation expenses were slightly less, often hovering between $5,810 and $6,280.

We can use these ranges to calculate how your monthly payments might look. Say you borrow $8,300, for example. With a 15.60% APR and a five-year term, you’d pay $200 a month and $12,005 total at the end of five years:

Of course, your payments could go up or down depending on the APR and repayment term you qualify for. If you borrowed the same amount at 22.30%, here’s how your payment would change:

Borrowing at a higher rate only raised your monthly payments by $31. That may seem like a negligible sum, but your interest expense and overall borrowing cost increased by $1,834.

Because your APR has such a significant impact on your payment amount and borrowing cost, we recommend getting preapproved with several lenders before applying for a loan. 

Compare your personalized rates to the average personal loan rates for your credit score, and use our personal loan payment calculator to determine each loan’s total borrowing cost. That way, you can choose the most affordable loan with the best rates.

Pros and cons of personal loans for funeral expenses

Pros

• Funding times are usually quick.

  You don’t always have much time to prepare for a funeral financially. The personal loan lenders we recommend offer short, online applications processes and funding as soon as the same day.

• Interest rates may be lower and more predictable.

  In many cases, personal loan rates are considerably lower than what you’d find with other forms of financing (credit cards, for instance). Personal loan rates are usually fixed, as well. You’ll have consistent monthly payments, with no surprise increases.

• You can use the funds for more than funeral costs.

  Personal loans are multipurpose by design. Whether you need to help a relative fly in for the service or have to settle lingering medical bills, leftover personal loan funds can help cover any indirect expenses that arise.

• You don’t need to put up collateral.

  Unlike other forms of financing, personal loans don’t require you to borrow against your home or your vehicle. That said, you could look into secured personal loans if you’re concerned about qualifying for unsecured loans.

Cons

• You’ll increase your debt burden.

  Taking out a loan means adding an extra payment to your budget, potentially for the next several years. Depending on how your loss impacts your financial situation, this could stretch your income further than you can comfortably manage.

• You may have to borrow more than you need.

  Many lenders set loan minimums. If your anticipated expenses are below that threshold, you’ll have to take out a larger loan than necessary. As a result, you may end up paying more monthly than you’d like—and more in interest over time.

There are several options in addition to personal loans to explore to pay for a funeral, including life insurance proceeds, investment funds from the deceased’s estate, and funeral insurance. You could also use a crowdfunding source to raise funds from family and friends. If you’re planning ahead, you can purchase a small (approximately $10,000) whole-life policy and update your will to state that the policy proceeds will be used for your funeral.

Erin Kinkade, CFP®

FAQ

Can I get funeral loans from the government?

Government programs typically don’t offer loans specifically for funeral expenses. However, some forms of financial assistance can help offset costs. 

Social Security provides a small death benefit of $255 to eligible surviving spouses or children. Veterans might qualify for burial benefits through the Department of Veterans Affairs (VA).

In addition, some state and local governments offer funeral assistance programs for low-income families. These programs can cover basic services, but availability and amounts vary. Contact your local government office to learn about any potential aid in your area.

If government help isn’t sufficient, consider a personal loan from a private lender or credit union.

If a veteran passes away, the surviving family members can typically be reimbursed for burial expenses. 

Erin Kinkade, CFP®

Do any lenders offer funeral loans for bad credit?

Yes, some lenders specialize in providing funeral loans for individuals with bad credit. These may include credit unions, online lenders, and traditional banks that understand the unique needs associated with funeral costs. However, interest rates for these loans can be higher because of the increased risk to lenders.

To find the best option, compare lenders accepting lower credit scores. Some allow cosigners to help secure better terms.

When considering a bad credit loan, understand the terms and conditions. Pay close attention to the APR, fees, and repayment schedule. By comparing multiple offers, you can find a loan that fits your needs without putting undue strain on your finances.

How we chose the best personal loans for a funeral

Since 2017, LendEDU has evaluated personal loan companies to help readers find the best personal loans. Our latest analysis reviewed 1,029 data points from 49 lenders and financial institutions, with 21 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of personal loans for a funeral