Everything You Need to Know About Funeral Loans

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

funeral loans
Logo

We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Losing a loved one isn’t easy. Not being prepared to pay for a funeral can add to that burden. The average cost of a funeral is $8,000 to $10,000, according to Parting, a funeral home comparison website. This includes costs associated with the funeral home, the ceremony, and the grave marker.

If you want to get a head start on financially preparing for a funeral or you need to cover its costs now, you might consider funeral loans. Here’s what they are and how to decide if you need one.

What are funeral loans?

A funeral loan is a personal loan. You can take out personal loans for a slew of purposes, from paying off high-interest credit card debt to staying up to date on bills. Funeral loans can cover costs such as burial or cremation, day-of services, and headstones.

You can get a funeral loan from a bank, a credit union, or an online lender. Regardless of which you choose, it’s important that you get a personal loan from a reputable institution.

In an urgent and stressful situation, such as losing a loved one, a payday loan might seem like an easy option. However, payday loans have high interest rates and difficult repayment terms.

If you compare personal loan lenders, you’ll find better interest rates and repayment terms.

Personal loans are typically unsecured loans, which means you don’t need to put up collateral — such as a car or house — to get a loan. Your interest rate and terms are based on your credit score, your income, and how much you can start to pay back as soon as possible.

Pros of funeral loans

Having access to a personal loan you can use in case of an emergency is important, especially when it comes to paying for a funeral. There are a few benefits of funeral loans you should know about.

  • Fast payout. With an online lender, you’ll get your money quickly — usually in one to three days.
  • Repay on good terms. You can set your repayment terms based on your financial situation. If you’re looking for low monthly payments, many lenders will work with your budget.
  • Good credit = low interest rate. The higher your credit score is, the lower your interest rate will be.
  • Keep your savings. If you’re trying to avoid tapping into your retirement account to pay for a funeral, a loan can keep you on track.

You shouldn’t have to choose between a funeral and your other expenses. Funeral loans can be a great way to help pay for costs if you’re short on cash.

Cons of funeral loans

Even though funeral loans can be helpful, they aren’t for everyone.

  • Bad credit = high interest. While it’s possible to get a personal loan with bad credit, a low credit score won’t help your chances. And a high interest rate makes it harder to make your payments on time in full.
  • Unnecessary money. If you aren’t sure how much a funeral is going to cost, you might take out more money than you need. That means you’ll have to pay back more money later.

One way to avoid overspending for funeral services is to know federal funeral laws.

“Most funeral homes price everything as a package, with the only variable price being the casket,” said James Philpot, an associate professor and the director of the financial planning program at Missouri State University. “Federal law requires them to break out the costs into an itemized list (and they do) and to allow a la carte pricing.”

Be cautious when you look into funeral loans. If you don’t have a steady income to pay back your loan on time and make at least the minimum payment each month, a funeral loan might not be right for you.

How to get funeral loans

If you decide a personal loan is your best option, there are a few steps to take next. Figuring out how much a funeral is going to cost makes it easier to determine how much you should borrow.

Here are some average funeral costs, according to Parting:

  • Funeral director’s services: $1,500
  • Casket: $2,300
  • Embalming: $500
  • Using the funeral home for the funeral service: $500
  • Gravesite: $1,000
  • Cost to dig the grave: $600
  • Grave liner or outer burial container: $1,000
  • Headstone: $1,500

Before you take out a loan, it might help to use our personal loan calculator to determine how much your monthly payments would be. From there, you can visit a bank, credit union, or online lender to apply for a loan.

Make sure you’re prepared with all the necessary documents, including:

  • Proof of address
  • Social Security number
  • Proof of income
  • Driver’s license number
  • The amount you’d like to borrow

You also might want to check your credit score before you apply so you can get a sense of the interest rate and terms you might qualify for.

Alternatives to funeral loans

If you’re having trouble getting a loan for a funeral, whether it’s because of a low credit score or an unsteady income, there are other options.

You might be able to use your savings or Social Security benefits (Social Security pays a death benefit to the surviving spouse) to pay for a funeral.

You also could use a credit card. Although credit cards tend to have higher interest rates than personal loans, using a credit card might be a good option if you don’t have great credit.

It’s especially important to avoid overspending with a credit card. Budget out exactly what you need and review the costs of caskets, services, and other fees so you know how much you’ll need to put on your credit card.

Funeral loans can be helpful

If you find yourself short on funds for a funeral, funeral loans can help. Whether you’re planning for a loved one or making your own arrangements, funeral loans can help you pay for the costs.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.58% APR to 14.87% APR (with AutoPay). Variable rates from 6.275% APR to 12.575% APR (with AutoPay). SoFi rate ranges are current as of July 16, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.275% APR assumes current 1-month LIBOR rate of 2.10% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.28% – 14.87%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.