An unexpected death in the family can be a difficult time for everyone involved. In addition to the emotional upheaval, funeral costs can add stress. Funeral homes typically offer a range of services, and the price can vary depending on the type of funeral you choose.
If your loved one had life insurance, you may be able to use the death benefit to pay for funeral expenses. If not, and if you’re not able to pay out of pocket, you may opt to take out an emergency loan to cover the costs.
Let’s walk through how to cover funeral costs with a personal loan, so you can focus on what matters most during this difficult time.
According to the most recent data from the National Funeral Directors Association, the median cost of a funeral with burial is $8,300, and the median cost of a funeral with cremation is $6,280. It’s important to note that these costs can vary greatly depending on the services chosen and the location of the funeral.
Funeral homes typically offer burial or cremation packages at a variety of price points, which is a convenient option when you’re grieving and struggling to make detailed plans, or when you have to plan a funeral quickly. However, you may be able to control funeral costs better if you shop around and choose the specific services and items you want individually. This can be a good way to give your loved one a fitting funeral without paying for anything that’s not meaningful to you.
Here are some common services and items included in a funeral package:
You should also consider any expenses beyond what the funeral home may charge, such as a gravestone, burial plot or vault, officiant and memorial service.
Before you borrow, explore other potential sources of funds. In some cases, you may be able to use money left behind by your loved one to pay off your loan, though not always right away. It can take several weeks or months to settle a will. Talk to the executor — the person your loved one chose to carry out the instructions of their will — to see how much might be available.
If your loved one passed away without much money, you’ll need to consider alternatives. One such option is to take up a collection from family, friends and coworkers. Internet crowdfunding is another common way to raise money for final expenses. Depending on how quickly the donations come in, they could either reduce the amount you have to borrow or help you pay back the loan later. However, it’s hard to predict how much you can raise this way, so be sure not to borrow more than you know you can manage yourself.
Once you’ve estimated the cost of the funeral and considered other financial resources, a personal loan can help you bridge the gap. Here’s how to approach the process step by step:
As with any loan, you don’t want to borrow more than you need. It’s important to think about how you want to lay your loved one to rest and weigh it against what you can realistically pay back. This can be an emotional decision, but keep in mind that your loved one probably wouldn’t want you to into unmanageable debt on their behalf.
Research loan options, taking into consideration interest rates and repayment terms. Consider prequalifying using the lender’s online tool to get a better idea of how much you can borrow.
Apply for a personal loan, ensuring you’ve gathered all necessary documents, such as proof of income and identification. Once the loan is approved, the lender can often deposit the money into your account within a day or two. Then you can use the funds to cover the funeral costs.
Make timely repayments according to your loan agreement to avoid damaging your credit score. Consider setting up automatic payments to help you stay on track. If your loved one’s estate pays you back or if you receive donations after the funeral, ask your lender if you can pay off your loan early.
After successfully paying off the loan, review your budget and expenses to prevent future financial strain.
It’s wise to do thorough research and budget accordingly when arranging a funeral. Seek assistance from a financial professional or loved ones, if necessary, to help with your loan application and repayments. And above all, take care of yourself during this difficult time.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of ocnjdaily.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
