Updated
May 25, 2023 Losing a loved one is a challenging time for family and friends. Emotions run high, and a funeral can be expensive.
Various funeral loans and other financing options exist, but you should consider them carefully.
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Funeral loans
Several financial institutions offer financing for a funeral. Below are some of our personal loan partners.
Upgrade
- Rates (APR): 8.49% – 35.99%
- Loan amounts: $1,000 – $50,000
- Credit score: 580+
Upgrade is a solid option for a smaller funeral loan. Its minimum loan amount of $1,000 is smaller than most other lenders’. Checking your rates with Upgrade won’t affect your credit score; eligibility is based more on free cash flow than competitors.
- Credit score category: Fair, bad
- Soft credit pull to check rates? Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
Upstart
- Rates (APR): 6.12% – 35.99%
- Loan amounts: $1,000 – $50,000
- Credit score: 580+
Upstart is an online lending platform that partners with banks to provide personal loans you can use for almost anything. Upstart’s lending model considers education, employment, and other variables when determining eligibility. This model leads to 27% more approvals and 16% lower rates than traditional models.
- Credit score category: Fair, bad
- Soft credit pull to check rates? Yes
- Deposit time: As fast as 1 business day
- Origination fee: 0% – 8%
- Late fee: $15 or 5% of payment
- Repayment terms: 36 or 60 months
What to consider with funeral loans
Most funeral loans are personal loans that are available from banks, credit unions, and even alternative lenders. Most personal loans come with fixed rates and predictable repayment schedules, and you can use them for just about anything.
Lenders will consider your credit score, income, expenses, and more when deciding if you are eligible and what your interest rate will be. Most personal loans do not require collateral.
To get the best personal loan rates, you will need a solid credit score, but bad-credit loans and fair-credit loans are available.
Funeral loan pros
- Quick funding: Online lenders are built for speed. The fastest service is available from online direct lenders, who can quickly approve loans and deposit funds in your checking account.
- Convenience: It’s easy to shop online for the best terms. You can apply online in just a few minutes and, once approved, access the funds the next business day.
- Fixed monthly payments: Spread out your repayment over a fixed number of months, meaning you don’t have to come up with a lump sum. Since rates are often fixed, your payments won’t change from month to month.
- Build your credit: Many online lenders report your loan activity to a national credit bureau. If you pay your loan back on or ahead of time, you might be able to raise your credit score.
- No need to tap into savings: Many folks don’t like to tap savings to pay for other expenses. They would rather pay interest on a loan than spend their savings. However, if you’re in an emergency this might make the most sense.
Funeral loan cons
- Interest rates can be high: APRs for personal loans can be high if you don’t have a decent credit score.
- Access: If you are a subprime borrower—with a FICO score below 600—you might not be able to find a lender to approve your application. The same is true if you have a scant credit history. If you are subprime and can secure a loan, you may need to put up collateral or accept a high APR.
- Tendency to overspend: You might be tempted to borrow more than you need. This creates a larger debt and extra interest expense.
- Availability of alternatives: You might be able to finance a funeral on your credit card. A number of alternatives are available that don’t involve debt, including:
- Prepaid funeral financing
- Death benefits from life insurance policies
- Savings accounts
- Totten Trust, a bank account payable upon death
- Other trust accounts
- Joint bank account with deceased
- Use of assets from deceased’s estate
- Cost sharing among family members
- Fundraisers and crowdfunding
- Asking the deceased’s employer for assistance
- Victim compensation
- Social Security benefits
- Payment assistance (see Funeral Consumers Alliance website)
- Assistance for veterans from the National Cemetery Administration
- Assistance from your local county treasurer’s office
Costs of a funeral
According to Parting.com, the average cost of a traditional funeral in North America runs from $7,000 to $10,000. Here are approximate figures for the main funeral costs:
- Funeral director’s fee: $1,500
- Casket: $2,300 (although less expensive caskets are available)
- Embalming: $500
- Funeral service: $500
- Grave site: $1,000
- Grave preparation: $1,600 (includes digging and lining)
- Headstone: $1,500
You might spend extra money on additional flowers, a reception, and musicians. Direct cremation is a less expensive alternative, running on average between $1,000 and $3,000, or more if you use a casket in the cremation. The Federal Trade Commission publishes a handy checklist if you want to shop funeral homes and compare prices.