The death of a loved one is painful enough without the unwelcome surprise of expensive final arrangements. As you grapple with grief, you may suddenly need to make difficult financial decisions on short notice.
Should you take out a personal loan for funeral expenses? Below, we’ll explore the pros and cons of this potential solution.
A personal loan allows you to borrow money for any purpose and then pay it back in fixed monthly payments with interest over a set repayment term. These common loans are useful for financing major one-time costs like home renovations, medical bills, vacations, and more.
Personal loans offer quick access to cash since they do not require collateral. Approval is based on your creditworthiness. The money lands directly in your bank account in a week or less, so you can put it towards any pressing needs.
Unlike other loan varieties designed for specific uses (like mortgages or auto loans), a personal loan provides financing for virtually anything personal. That includes final farewell costs for someone close to you.
Key Takeaway: Personal loans provide fast access to money without requiring collateral, offering financing flexibility for varied expenses like funeral costs.
Few people can afford to cover funeral costs out-of-pocket today. The average funeral is over $9,000 – and that’s excluding cemetery, monument, or obituary notice fees. For context, half of Americans cannot comfortably handle a surprise $500 bill.
What if you lack sufficient savings to give your family member, spouse, or dear friend the memorial they deserve? A personal loan provides financing when you need it most. Because the money becomes available quickly, it enables you to move rapidly to make final arrangements unburdened by anxiety around costs.
Beyond urgency, personal loans offer reasonable predictability through fixed monthly repayment schedules. This contributes to financial clarity and spreads the economic impact over time, easing strain.
Experienced online lenders like Level also offer a quick application process and superior customer service while keeping interest rates and fees as low as possible.
Key Takeaway: Personal loans allow you to pay for urgent, expensive funeral arrangements when savings fall short, offering fast money and predictable repayment terms.
Let’s explore the key advantages of personal loans for covering burial and cremation costs:
While no amount of money can erase the anguish of losing someone close, personal loans allow you to grieve without the pain of struggling to finance final tribute costs because funds become available in your account within days.
Affording an unexpectedly costly funeral feels less intimidating when you can pay set monthly amounts over the years instead of summing costs in your head worriedly.
When cemetery costs creep higher than imagined, turning to a personal loan means reliable money unblocked by the lack of property or assets to offer as insurance. Approval depends on credit alone.
Rather than juggle separate payments careening from florists to caterers, simplify by consolidating necessary costs through a single personal loan.
Key Takeaway: The main pros of personal loans include quick cash accessibility without collateral plus consolidated, predictable repayment installments.
Despite advantages, using personal loans for bereavement ceremonies has drawbacks that must be weighed carefully.
While deeply discounted due to a lack of underlying asset security, personal loan interest rates often exceed 10% and sometimes surpass 35%. Be cautious.
When not paid diligently, missed or late personal loan payments could negatively impact credit scores and loan eligibility for years.
Financing funeral expenses through personal loans may saddle grieving families with five- to seven-year repayment terms outlasting acute sorrow.
Borrowers considering postsecondary education should note that steep outstanding personal loan balances could restrict federal student aid capacity.
Key Takeaway: Potential cons like high interest, credit score drops and lasting debt illustrate the need to evaluate personal loans cautiously based on repayment ability.
While fast financing access constitutes their chief benefit, personal loans have alternatives worth considering before taking on funeral costs through borrowing.
Purchasing life insurance supplies affordable financial preparation for posthumous ceremonies and other final expenses. Payouts allow rapid coverage.
Creating an online crowdfunding campaign allows you to request contributions from friends, community members and the wider public.
Specialized policies supply dedicated funding for assured last rites. Premiums pale in comparison to swollen funeral home demands.
Key Takeaway: Viable funeral cost alternatives like life insurance, crowdfunding donation requests or dedicated funeral policies may beat personal borrowing.
Losing someone dear unleashes sorrow enough without money mourning. Personal loans allow urgent access to funds for funeral costs when grieving families otherwise lack financial preparation, offering clear advantages.
The path ahead looks steep. But you can climb it steadily through the fog, one foot after the other. Things will get brighter in time. For now, just keep placing purposeful feet forward, focused calmly on thoughtful remembrance.