Is a Personal Loan the Best Way to Cover Funeral Costs?
Funeral costs vary a great deal depending on the ceremony. A funeral can represent many things:
- Closure for a stressful and sad occurrence
- An opportunity to say goodbye
- A reason to gather family and friends
- An occasion for remembrance
- A chance to demonstrate regard for the deceased and his or her loved ones
A personal loan for funeral costs may be the least stressful way of covering this final expense.
Funeral costs
Funerals can cost anywhere from a few hundred dollars to tens of thousands. Ceremonies range from informal gatherings of friends to grand productions for public figures.
According to the Federal Trade Commission (FTC), funeral providers can charge a basic services fee that includes funeral planning, getting the required permits and copies of death certificates, preparing the public notices, caring for the remains, and dealing with the cemetery, crematory and other third parties.
In addition, you can choose to purchase optional services and goods like transporting the remains, embalming and other preparation use of the funeral home for the viewing, ceremony or memorial service, equipment and staff for a graveside service, hearse or limousine, casket, outer burial container or alternate container and cremation or interment.
In addition, you may pay cash advances for goods and services from third parties. These might include flowers, obituary notices, pallbearers, officiating clergy, organists and soloists. Pay attention to the details — some funeral homes just pass the costs through, while others add a service charge to the bottom line.
What is the “Funeral Rule?”
While most funeral homes promote mainly packaged deals with a selected assortment of services, the FTC’s Funeral Rule requires them to allow you to purchase only services that you wish. Here are your rights under the Funeral Rule:
- Buy only the funeral arrangements you want
- Get price information on the telephone
- Get a written, itemized price list when you visit a funeral home
- See a written casket price list before you see the actual caskets
- See a written outer burial container price list
- Receive a written statement after you decide what you want, and before you pay
- Get an explanation in the written statement from the funeral home that describes any legal cemetery or crematory requirement that requires you to buy any funeral goods or services
- Use an “alternative container” instead of a casket for cremation
- Provide the funeral home with a casket or urn you buy elsewhere
- Make funeral arrangements without embalming
The funeral provider must by law provide an itemized statement of the total cost of the funeral goods and services you choose. If it doesn’t know the exact cost of the cash advance items, you should still receive a written “good faith estimate.” Use this to compare funeral costs and choose the best combination of goods and services for the ceremony you want.
How to pay for funeral costs
You may be offered financing at the funeral home when you shop for services. This may not be the best way to obtain your financing. One funeral industry blog touts offering “point of sale” loans because it speeds up the process and helps grieving folks find extra money to pay for funeral costs fast.
But what’s good for funeral sales might not be great for families. Making an expensive purchase quick and easy, especially when the buyer is grieving and not inclined to shop or negotiate costs, could do long-term financial harm to the buyer. In addition, it’s difficult to shop for the best interest rate with the funeral director breathing down your neck.
Instead, determine first what you can afford to pay. Then compare offers from personal loan providers to see what interest rate, terms and loan amount you can afford. Once you have a budget, you can resist pressure from funeral directors to spend out of your comfort zone.
Use the handy checklist below to decide what goods and services are most important to you. And don’t forget that you have the right to buy a coffin, urn or other merchandise from other providers than the funeral home — even online if you choose.
Average funeral cost and payments
The average funeral cost as of this writing runs about $8,000. Personal loans for funeral costs are widely available, most commonly with terms of up to five years. The charts below show funeral loan payments for different interest rates and terms.
Checklist for funeral costs (source: FTC)
This helpful checklist from the FTC can help you compare costs when determining the services and goods you want and where to get them:
“Simple” disposition of the remains:
Immediate burial __________
Immediate cremation __________
If the cremation process is extra, how much is it? __________
Donation of the body to a medical school or hospital __________
“Traditional,” full-service burial or cremation:
Basic services fee for the funeral director and staff __________
Pickup of body __________
Embalming __________
Other preparation of body __________
Least expensive casket __________
Description, including model # __________
Outer Burial Container (vault) __________
Description __________
Visitation/viewing — staff and facilities __________
Funeral or memorial service — staff and facilities __________
Graveside service, including staff and equipment __________
Hearse __________
Other vehicles __________
Total __________
Other Services:
Forwarding body to another funeral home __________
Receiving body from another funeral home __________
Cemetery/Mausoleum Costs:
Cost of lot or crypt (if you don’t already own one) __________
Perpetual care __________
Opening and closing the grave or crypt __________
Grave liner, if required __________
Marker/monument (including setup) __________
Related: Personal Loan Interest Rates (How to Pay Less)
Controlling funeral costs
If you are able to plan for funeral costs in advance, you can avoid being pressured into paying for services you don’t need. And you can shop for the lower cost providers. If you have to plan a funeral suddenly, enlist the help of someone less affected by the death to help you avoid financially harmful decisions during a stressful time.
Finally, you can reduce funeral costs by paying for them with the least expensive financing available. A personal loan is likely less costly than a credit card. And has the advantage of a fixed interest rate and term. This makes budgeting for funeral costs easier and you’ll probably appreciate it later when you’ve finished saying goodbye.
