The Complete Guide to Funeral Loans

Updated on April 9, 2024

At a Glance

  • Funeral loans provide quick access to funds for covering funeral expenses with a streamlined process and faster disbursal.
  • Stilt offers funeral loans from $3,500 to $20,000, featuring easy income validation and affordable interest rates.
  • These loans offer convenience, preventing the need to dip into savings and providing financial stability during a challenging time.
  • Alternatives include using life insurance, burial insurance, Payable on Death accounts, or veteran benefits, while saving money on funeral costs can be achieved by shopping around and considering options like direct cremation.

The death of a loved one isn’t easy to deal with. Emotions run high as you prepare to say the final goodbye to your loved one. Being unprepared for funeral costs can further add to that burden. Needless to say, not everyone is well-equipped financially to set funds aside for this purpose, especially in the event of an untimely death.

One financial option worth considering in such a situation is a funeral loan. A funeral loan enables you to conduct the funeral without worrying too much about the immediate consequences. A funeral loan from Stilt can come as a huge relief in this regard. This affordable loan is specifically designed to provide quick financial assistance for funeral purposes.

What Are Funeral Loans?

Planning in advance is the most cost-efficient way to arrange a funeral. However, things don’t always go according to plan. While there are people with foresight who save ahead, funerals bring an unexpected financial burden for the majority of families. A funeral loan can help avoid the added distress.

Funeral loans are essentially personal loans, however, the procedure is less cumbersome and the disbursal time is faster. Normally, personal loans are approved after carefully considering the applicant’s creditworthiness—credit score, income, expenses and credit history.

The scrutinizing procedure for funeral loans involves minor hurdles, especially if you are using the loan service from Stilt. You can arrange a funeral loan from Stilt in the range of $3,500 to $20,000 just by validating your source of income. You can repay the loan amount over a set number of months by paying an affordable rate of interest.

Pros and Cons of Funeral Loans

When it comes to any form of financing, there are pros and cons that come with the territory. Evidently, the same goes for funeral loans, which have a lot in common with personal loans. This form of financing is used specifically for covering all the costs associated with the funeral service – which, you might already know by now, can add up.

To that end, let’s have a look at the main pros and cons linked with loans for funerals or emergency funeral funds, as some would call them.

Pros of Funeral Loans

The death of a loved one can happen without notice. So, not only that this can be emotionally draining, but it may also be a major hit from a financial point of view. This is why we could say that one of the main pros associated with emergency funeral loans is the fact that they provide quick access to cash.

In other words, if you don’t have the financial ability to pay for the funeral, such a loan provides you the funds you need. Usually, you can get the money in a matter of days. However, this will depend on the lender – so, if you need the money ASAP, make sure you discuss this in advance. In this way, you won’t have any unpleasant surprises.

Another benefit linked with emergency funeral loans would be this: if your credit score is good, then the odds are that you can take advantage of convenient loan terms. Therefore, you don’t have to stress too much about getting a bad interest rate, especially if you’re collaborating with a lender that gets you.

In addition to that, many lenders are eager to collaborate and adjust the repayment terms depending on your financial situation. Make sure you bring the topic into discussion if you want a specific repayment schedule.

Another pro worth noting would be that by getting a funeral loan, you don’t have to use your savings. Dipping into your savings can be quite stressful, as it could leave you uncovered in case something unexpected were to happen. So, if you don’t want to go down that path, emergency funeral loans will address your needs.

Cons of Funeral Loans

Now, let’s focus a bit on the main cons associated with funeral loans. Although loans for funerals come with many benefits, you shouldn’t neglect the risks that come with the territory. Hence, loans for funerals aren’t suitable for everyone.

For one thing, if your credit is bad, this means you will be paying a lot of money due to high interest rates. Although that isn’t to say there aren’t funeral loans for bad credit on the marketplace, there are some options in this respect as well. Nevertheless, the costs linked with funeral loans for bad credit are significantly higher than in most cases.

This is why you should weigh the pros and cons before making a decision in this respect. Otherwise, you might end up sinking in debt, and that isn’t a sensible approach to borrowing money.

Aside from this, if you don’t know for sure the estimate costs of the funeral, you might end up borrowing too much money. This isn’t the right approach either since you will increase your outstanding debt without this being necessary.

That being said, it’s up to you to be a responsible borrower and consider the pros and cons we already mentioned. This is ultimately the key to making loans for funerals work for you.

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Estimated Cost of Funeral Expenses

One thing is for sure, one of the safest ways in which you can avoid borrowing too much money is to know the estimated cost of the funeral.

Basically, the sum of money you borrow should cover all the expenses. Of course, it also makes sense to have a small margin just in case you have any unanticipated expenses. Although borrowing too much money isn’t the way to go, getting a sum that is too small might be stressful. In addition to that, if the sum of money you borrow is too small, you might not be able to qualify to get another loan in such a small time frame.

On that note, the average cost of funeral expenses ranges from roughly $6,000 in the case of cremation to $9,000 for burials with a vault. More and more people choose cremation as a more favorable alternative to traditional burials. In fact, by 2035, it is believed that the rate of cremations will go as high as 79 percent.

Although you can use these estimates to gauge the amount of money you need, there are other variables that should be taken into account. For one thing, the place you live will also influence the price of the funeral expenses. At the same time, the products and services you choose will weigh a lot in the equation, as well as the number of people attending the service.

As a rule of thumb, you should always get numerous quotes from different funeral companies before signing a contract. In this way, you will know for sure that you’ve made the right decision for your financial scenario. Shopping around can really help you save some money. So, make sure you don’t make a decision on a whim.

How Can a Funeral Loan Help in Your Time of Need?

There are many advantages of funeral loans. The most obvious one is the assurance of financial stability when you need it most. The other benefits associated with funeral loans are:

1. Speed

A funeral is a time-bound procedure. Quite naturally, the process of loan approval and disbursal is faster compared to other types of loans. Stilt offers you lightning fast services when it comes to funeral loans. All loan requests are quickly approved and the funds get deposited in your account within hours. With a Stilt funeral loan, you can be assured of experiencing a smooth and seamless service.

2. Convenience

As stated previously, funeral loans are less scrutinized. Stilt offers you the ability to apply online by uploading the required documents with the approved funding getting credited to your account on the next business day. There’s no need to visit bank branches and go through a difficult paperwork process.

3. No Need to Break Into Savings

Most of us don’t like to tap into our savings, especially retirement funds. Spending savings on a funeral expenditure may adversely affect our future financial goals. A loan for a funeral can be of great help to keep your savings intact for future emergencies.

What If Your Loved One Lived Back in Your Home Country?

Being in your native land brings a sense of security and peace of mind. This holds true for financial security as well. If you are an immigrant in a foreign country, securing a loan can be a difficult task. It is especially true here in the United States. Many banks and lending services do not deal with immigrants, which could put them under great stress and anxiety.

At Stilt, we offer equal service to all people of all nationalities. No matter if you are an American citizen, a green card holder, or an immigrant, you can be assured to receive the same priority treatment from Stilt.

Funeral Loans: How Much Should I Borrow for a Funeral?

Moving on to the amount of money you should borrow for a funeral, you should make this decision based on the estimated cost of the service you are planning. This is why you should get quotes from several companies.

This is critical to avoid having unpleasant surprises regarding the overall costs of the funeral. Once you know the approximate cost of the service and the burial or cremation, you can determine the sum of money you need to pay for all the expenses.

Another sensible idea you might consider before browsing for emergency funeral funds would be using a personal loan calculator. This will come in handy, allowing you to estimate how much the monthly payment will be. This will give you an idea of what you can afford to repay. It’s best not to overlook your financial situation during this time.

Personal Loans for Funerals: Are the Terms Better?

As we’ve already pointed out, in many ways, loans for funerals are similar to personal loans. The main difference would be that they aren’t as specific as funeral loans since you can use the money for all kinds of expenses.

However, the truth is that, in some cases, you might take advantage of better, more convenient terms when it comes to personal loans. Aside from this, personal loans may be divided into fixed and variable, depending on the type of interest rate.

In the meantime, even if you have bad credit, you might still secure a personal loan. But the lender might require you to provide collateral as security for the loan.

As you can see, there are many aspects that should be considered in this equation. Fundamentally, it’s up to you to compare different rates and terms, to determine what you qualify for. You might even compare different personal loans with the terms on emergency funeral loans, to determine whether there are actually more advantages associated with them or not.

There are no hard rules here – things can vary depending on the lender, your individual scenario, so on and so forth.

Funeral Loans with Stilt

A funeral loan with Stilt is quick, convenient, and easy.

You can fill out a simple loan application form from Stilt and upload the required documents within minutes. A quick verification phone call is scheduled, in case any additional information is required.

A Stilt representative will get in touch with you within 24 hours after evaluating your application. Once the loan application is approved, you’ll need to sign a promissory note and the funds will be released as soon as possible. It usually takes 2-3 days for the amount to reflect in your bank account.

Stilt has worked with thousands of borrowers and has lent millions of dollars for funeral costs.

Alternatives to Funeral Loans

You might also wonder whether there are some convenient alternatives to funeral loans. Aside from personal loans, there are other ways in which you could cover the expenses linked with a funeral.

Firstly, you could use the life insurance of the deceased. If that is applicable to you, then the policy will most likely cover some or part of the costs. Another option would be the burial insurance, which addresses the costs involved with the death of the person.

If the deceased person had a Payable on Death account (POD), this could be of help as well. Basically, this is a bank account, which entails that the beneficiary gets access to the funds when the owner of the account passes away. In this situation, the amount of money can be used in this respect, meaning that you don’t have to worry about taking out a funeral loan.

If the deceased person was a veteran, then he/she is entitled to get a free burial at a national cemetery. The survivors of the veteran will also receive a burial allowance, which essentially covers the costs linked to the funeral. Even if the family decides the burial to be outside the national cemetery, you are still entitled to get an allowance that will cover part of the expenses.

In case your spouse is the one that passed away, this would mean that social security is responsible for paying a specific death benefit to you. While the sum of money isn’t too large, it will help out.

3 Tips for Saving Money on Funeral Costs

1. Shop Around

When it comes to funeral loans, there are plenty of lenders out there with different terms, conditions, interest rates, and repayment schedules. Compare the offers and zero in on the one offering the most cost-effective package.

2. Forego Embalming

If you are on a tight budget, it can be a good idea to drop embalming. Embalming can cost you around $500, which can save around 10% – 15% of the overall funeral cost.

3. Consider Direct Cremation

The cost of a funeral casket can go as high as $2,300 – thanks to the marketing gimmicks. Instead, you can go for a wooden box or consider a cremation with a modestly priced urn.

Final Thoughts

If you find yourself short on funds for a funeral, a funeral loan can be of great help. It can provide financial stability to the bereaved family at a time of need. Getting a funeral loan can be quick, convenient, and easy. Just make sure you understand the full terms of the loan before signing the agreement.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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