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How to get a loan to cover funeral expenses

What Are Funeral Loans and How Do I Apply for Them?

Updated on December 18, 2023


Death and funerals are complex topics, as they inevitably bring up memories of loved ones who have passed away. Funerals can also be costly, with families worrying about funeral expenses and all the other emotional pains that come with losing someone.

What Is a Funeral Loan?

Funeral loans are personal installment loans that you use specifically to pay for funeral expenses such as burial plots or caskets. They are mainly used by people who cannot pay for a funeral right away. Instead, you borrow money with added charges and pay it back over a period of time, usually within a year.

Most lenders offering this type of loan cap amount to $10,000. Still, if you meet additional criteria, some may extend higher limits on request.

How Do They Work?

Funeral loans cover the costs associated with funerals and other end-of-life services. These loans typically have repayment terms that range from three months to two years, depending on the lender and borrower's financial situation. Loans like these often have high interest rates, so it's important to know the terms before signing anything.

Funeral loan lenders typically require proof of income and good credit to approve an application for one of their products. Before deciding, borrowers should research lenders, compare interest rates, repayment terms, and fees associated with the product. Additionally, borrowers should know that some lenders may not provide funds until after the funeral.

What Are The Benefits?

One of the main advantages of taking out a funeral loan is that it allows you to pay for your loved one's services without having to use savings or put money on credit cards that may take months or even years to pay off.

Many lenders allow borrowers to apply online. This is convenient for individuals who require additional time or are unable to visit a physical location. It's helpful for getting money fast. Lenders can approve and provide funds within 24 hours, sometimes even on the same day.

How Much Does a Funeral Cost?

According to the National Funeral Directors Association (NFDA), the average cost of a funeral in 2021 in the U.S. was $7,848. If the cemetery requires a vault for the coffin, the price increases to $9,420.

The average cost does not cover additional expenses. These costs cover cemetery fees, monument expenses, flowers for the viewing, and online or newspaper obituaries.

Funerals with a Cremation Cost Less

Honoring a life lost can be costly, but there are ways to make it more affordable. Choosing cremation for the funeral service instead of burial is one way to cut costs. The National Funeral Directors Association (NFDA) states that, on average, in 2021, cremation funerals cost around $6,970.

Who Covers Funeral Costs?

Typically, covering the funeral cost falls to the surviving spouse or partner of the deceased. If there is no surviving spouse, the estate must leave funds to cover the expenses, or family members must pay out of pocket.

Unfortunately, when the funeral costs unexpectedly arise, and there is no plan for financing a funeral, it can be difficult for the family, who has to find a way to pay for the expenses.

What if you can't afford a funeral?

What if You Can't Afford a Funeral?

Families who are unable to afford a traditional funeral service may want to try these cost-saving options:

Speak with the funeral home director:

The NFDA recommends individuals planning funerals discuss their budget and payment options with the funeral home director. Some funeral homes allow payment plans and accept credit cards, cash, checks, or prearranged funds for payment.

Remove certain services or steps:

You can alter the funeral package, which may lead to significant cost savings. Some decisions may be difficult, but they can help families avoid difficult financial situations.

Take out a funeral loan:

Taking out loans for funeral expenses should be done carefully because taking on debt during heightened emotions can worsen family matters. You should consider cost-cutting measures, especially if you have bad credit.

Look at other loan products:

A secured loan, like a home equity loan, may be an option for those who are comfortable using their home as collateral and want to minimize interest costs. Meanwhile, credit unions offer a payday alternative loan that could benefit borrowers with less-than-perfect credit.

How to Find the Right Funeral Loan?

Finding the right one for your particular needs can be challenging, but it doesn't have to be overwhelming. Begin by researching lenders and comparing interest rates, repayment terms, and additional expenses such as closing fees or late payment penalties. You should check if certain lenders have any special requirements for you to be eligible for their rates and terms.

Finally, ensure you understand the loan's total cost over its duration so you'll have an accurate estimate of how much money you'll need when paying for the service. With these steps, you can rest assured you will have found the best funeral loan available.

How Much Money Should You Borrow?

When faced with the death of a loved one, money is probably the furthest thought from your mind. Yet, families must know the costs of organizing a funeral and decide how much money should be borrowed to cover the expense. While some people prefer to use their savings or funds from investments, other options, such as taking out a loan, are available.

It's essential to be conscious that finance and interest rates must be considered when making this decision to ensure sustainable repayments. Researching different providers can help you decide how much money you want or need to borrow and which loan packages are best suited for covering funeral costs.

How to Get a Loan for a Funeral

If you do consider a funeral loan, you should follow these steps:

  1. Make a list of priorities: The family should discuss what is most important to them. Hence, they only incur expenses for valuable items. Decisions must be made regarding whether a burial or cremation will take place. Considerations must also be given to having a viewing or opting for something more private.
  2. Get several estimates for the funeral: It's beneficial to consult with multiple funeral homes to obtain cost estimates and find the most economical option. Doing so can help secure a lower loan, thus avoiding paying more interest.
  3. Know your credit score before applying for a loan: A strong credit score can help secure an affordable loan with a reasonable interest rate and repayment term. Those with low credit scores may find personal loans costly, potentially causing more harm than good. It is crucial to ensure that the loan has a reasonable interest rate.

Additionally, it is important to ensure that the monthly payments can be easily managed. This is done to avoid any challenging financial situations for oneself or family members.

  1. Apply for preapproval with several lenders: Most offer preapproval for loans with a soft credit check. A soft credit check does not impact one's credit score, allowing potential borrowers to view rates and terms they may qualify for and not affect your credit score.
  2. Review lender rates and fees: Once you have a few lenders, you like to compare their fee structures. If you haven't already, read borrower reviews to understand how the lender conducts itself. This can help you narrow down your list to one lender.

Once you're comfortable with a lender, you may formally apply. Doing so will trigger a hard check on your credit. The lender will work with you to deposit the funds into your account so you can pay for funeral services.

What are alternatives to funeral loans?


Use Life Insurance

Life insurance is an essential tool for younger families to consider as it can provide a financial safety net in an unexpected situation. Life insurance pays for funerals and can provide ongoing financial support for loved ones, depending on the coverage.

Use Emergency Funds

Families should prioritize establishing an emergency fund, with average funeral costs of nearly $10,000. It does not necessarily have to be for funeral costs, but it should be enough to cover specific financial emergencies.

In-House Funeral Financing

Depending on the funeral home, you may be able to apply for in-house financing to cover the cost of the funeral and memorial service. Instead of borrowing money through a bank, credit union, or online lender, you can opt-in to the funeral home's payment program and repay them directly.

Funeral homes offering financing packages typically require the service to be repaid within 6 to 12 months. Still, the repayment period varies based on company policy. To use the funeral home's payment plan, speak with the funeral director about interest rates and repayment schedules.

Have Low APR Credit Card

Many people turn to credit cards as an option. Often, the best type of card to use is one that offers a high borrowing limit and low annual percentage rate (APR).

One can also potentially qualify for introductory 0% APR credit cards, which can help reduce the financial burden by allowing one to avoid paying interest on funeral expenses during a promotional period. Promotional periods last 12 to 21 months. After that, you have to pay regular interest on any remaining balance. So, it's important to pay off the whole balance before the end of the promotional period to save the most money.


Funeral loans can cover funeral expenses if you are eligible and carefully consider the loan terms. Before taking out a funeral loan, there are many things to consider, such as how much you will need to borrow, the interest rate, the repayment schedule, and whether you can make the payments. Suppose you are considering taking out a funeral loan. In that case, we suggest researching ahead of time and comparing offers from multiple lenders to find the best option.