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While funeral costs can be challenging to manage, there are financing options available, including unsecured personal loans.

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Borrow to Cover Funeral Expenses?

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When a loved one passes away, it is often a difficult and emotional time for those left behind.

The last thing anyone wants to think about is how to pay for the funeral expenses. While funeral costs can be challenging to manage, there are financing options available, including unsecured personal loans. In this article, we will explore the use of personal loans for funeral expenses, highlighting their benefits, drawbacks, and alternatives.

What Are Unsecured Personal Loans?

An unsecured personal loan is a type of loan that does not require collateral, such as a house or car. These loans are based on the borrower's creditworthiness, financial situation, and other factors determined by the lender. Because unsecured personal loans do not require collateral, they can be a beneficial financing option for funeral expenses.

Benefits of Unsecured Personal Loans for Funeral Expenses

Unsecured personal loans can provide a quick source of funding for paying funeral expenses. Funeral costs can add up quickly, and sometimes families need to secure funds quickly to cover the expenses.

Another benefit of personal loans for funeral expenses is flexibility. Borrowers can use the funds for a variety of expenses related to the funeral, including casket or urn costs, flowers, burial or cremation fees, transportation costs, and even post-funeral expenses.

Also, unsecured personal loans typically do not have any restrictions on how the funds can be used. The loan can be taken for a term of between 3 to 7 years. The longer the term the more interest you will potentially pay but the payments will be lower. Not all lenders charge ongoing and early termination fees. So borrowing even for a short period may be a valid option if there are complex property settlement issues which could delay accessing funds from the estate to cover the funeral costs.

Drawbacks of Unsecured Personal Loans for Funeral Expenses

The downside of unsecured personal loans is that they may come with higher interest rates than other financing options. This can make them a more expensive option in the long run, and they may also require higher monthly payments.

Additionally, not everyone will qualify for an unsecured personal loan, especially if they have poor credit history or a high debt-to-income ratio. This can limit access to the funds necessary to cover funeral expenses.

Alternative Financing Options for Funerals If unsecured personal loans are not the best option for your situation, there are other financing options available.

One alternative is funeral payment plans offered by funeral homes. These plans require a down payment and allow the family to pay off the rest of the funeral costs in regular instalments. Another option is credit cards, which can be used for covering funeral expenses. The interest charges on credit cards is normally significantly higher than a personal loans, if the funeral expenses are not repaid inside the current billing cycle.

Statistics on Funeral Expenses According to the most recent data available from the Australian Securities and Investments Commission (ASIC) – Money Smart, the average cost of a basic funeral in Australia is around $6,000 to $18,000. However, this figure can vary significantly depending on numerous factors such as location, funeral home, burial or cremation, and additional services or products such as flowers, memorial books, or catering.

It's worth noting that some funeral homes offer affordable funeral options for families on a tight budget. Additionally, you may be eligible for government assistance to help cover funeral costs under certain circumstances, such as if you are receiving a Centrelink payment or if the deceased person was a veteran.

According to Anton Brown Funerals - In 2023, the average funeral cost in Australia can vary considerably from $2000 – $12,000 with the median average sitting around $7000. That said, funerals do not need to cost that much, it ultimately comes down to the type of service you choose, and whether you opt for a burial or cremation.

Final Thoughts

Planning for funeral expenses can be a challenging and emotional process, but there are financing options available. Unsecured personal loans can be a quick and flexible source of funding, but they do come with an interest cost. Alternative options include funeral payment plans and specialized funeral loans. Before deciding on a financing option, it is crucial to consider your financial situation and choose the option that best fits your needs. Furthermore, it is always a clever idea to review funeral expenses and see where you can cut costs while still honouring your loved one's memory.

Find That Finance has access to multiple lenders who offer personal loans.

Possible steps, to get a loan to cover funeral expenses.

• Contact Us, you will be allocated your own dedicated Finance Broker.
• Get a free loan eligibility assessment!
• As Eligible than put a pre-approval in place.
• Loan Terms 3 to 7 years.

If we can be of assistance in helping you get the funds you need at this time let us know.