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Sending off your loved one with dignity is anyone’s wish. However, if they had no funeral policy in place it can be difficult to juggle the various expenses that come with a funeral. Taking out a personal loan can help you flexibly manage the expenses without having to break the bank to do so. These three handy tips can help you choose a personal loan that is suitable for your needs.
Know the cost
Before you look for ways to finance a funeral, calculating the cost beforehand can help you adequately cover it. This also means setting a budget in place so that you do not overspend on things that you could do without. The cost of a funeral can cost $4,000 for a basic cremation to $15,000 for pricy caskets. Create a budget that will adequately cover the basics such as:
- Funeral director’s fee
- Funeral service
- Casket
- Gravesite
- Grave preparation
- Headstone
- Embalming
The pros of taking out a funeral loan
Planning a funeral in advance can help you compare your options calmly and see what other options are available to you. The same goes for taking out a funeral loan which is a personal loan that you can use to take care of your funeral expenses. Some of the benefits that come with taking out a funeral loan are:
- You can spread out costs. You can choose to pay back your loan over a select period that is suitable for your finances.
- Access to low rates. You can get access to multiple lenders to access a rate that is affordable to you.
- Can adequately cover costs. Taking out a loan makes more sense when you are in an emergency and have to handle expenses without crippling your finances.
Mistake to avoid when taking out a funeral loan
As much as funeral loans can come with benefits that can help families during this difficult time, it is still important that you check that the loan is suitable for your circumstances. This means comparing various interest rates and using a loan calculator to see if the interest rate will be affordable over the term of the loan.
Comparing loans can help you find one that is financially within your reach, which means you need to check your credit score and credit report before applying. Borrowing according to the needs of the funeral can help you take out an amount that will adequately cover your expenses.
Overspending by taking out more than you should on a loan can create debt and also pile up the interest that is owed. Always keep in mind to compare and calculate so that while you send your loved one off in a dignified manner you won’t be left with a mounting debt to take care of.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
