What Are Funeral Loans and Where Can You Find Them?

Cover a loved one’s funeral expenses with a personal loan

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Written by
Lauren Nicholson
Updated July 30, 2024
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Losing a loved one is hard enough without worrying about how you’ll pay for a funeral. If you don’t have enough savings to pay your loved one’s burial expenses out of pocket, funeral loans can help you cover the upfront costs while you pay them back over time. However, there is a lot to consider before you commit to financing a funeral.

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7.99% - 24.99%

36 to 84 months

$2,500 - $40,000

720

Pros
  • Competitive interest rates
  • Check rates without damaging credit
  • No upfront fees or prepayment penalty
Cons
  • Requires good to excellent credit
  • Charges late payment fee

What to know

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Discover loans are one potentially low-cost way to finance a funeral since they come with no upfront fees and low starting rates. If your loved one left behind money to cover some of the funeral costs, Discover may be a good option for you, since Discover loans start as low as $2,500.

The catch? You’ll need good or excellent credit to qualify for a Discover loan, and if you miss the payment due date, you’ll be on the hook for a $39 late fee.

Read our full Discover personal loan review.

How to qualify

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To be eligible for a Discover loan, you must meet the following requirements:

  • Minimum credit score: 720
  • Minimum individual or household income: $40,000
  • Be 18 years old or older
  • Have a valid U.S. Social Security number
  • Have a physical address
  • Have an email address and access to the internet
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7.99% - 35.99%

24 to 72 months

$1,000 - $36,500

660

Pros
  • Loans start at $1,000
  • Check rates without damaging credit
  • Qualify with fair credit
Cons
  • High maximum interest rates
  • Upfront origination fee
  • No joint loans

What to know

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If you have fair credit, consider LendingPoint to finance funeral expenses. While LendingPoint does charge steep maximum interest rates, you can check your rates without damaging your credit by prequalifying for a loan. Plus, LendingPoint offers loans as small as $1,000, making it a great option for borrowers who only need to finance a portion of the funeral costs.

Heads up: LendingPoint loans come with an upfront charge called an origination fee, so make sure to weigh this fee as you consider your loan options.

Read our full LendingPoint personal loan review.

How to qualify

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To get a funeral loan from LendingPoint, you must meet its minimum criteria:

  • Minimum credit score: 660
  • Minimum annual income: $35,000
  • Be 18 years old or older
  • Provide identification issued by the U.S. government
  • Have a Social Security number and bank account
  • Not live in Nevada or West Virginia
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7.49% - 25.29% (with autopay)

24 to 84 months

Loan Term Disclosure

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $25,000 loan at 7.49% APR with a term of 3 years would result in 36 monthly payments of $777.54. © 2024 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

$5,000 - $100,000

Not specified

Pros
  • Low interest rates
  • Autopay discount
  • Potential for same-day funding
  • No fees
Cons
  • Requires good or excellent credit
  • Loans start at $5,000
  • Can’t check rates without impacting credit

What to know

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You could save serious money on interest payments and administrative fees with a funeral loan from LightStream. Borrowers with excellent credit can take advantage of LightStream’s starting rates, which are the lowest on this list, as of this writing.

LightStream loans aren’t for everyone. You’ll need good or excellent credit to qualify, and you can’t check your rates without submitting to a hard credit pull, which will temporarily drop your credit score by around five points.

Read our full LightStream personal loan review.

How to qualify

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LightStream does not specify a minimum credit score, but you will need good or excellent credit to qualify for a loan. People with the following characteristics are more likely to be approved:

  • Five or more years of credit history
  • Different account types (e.g., credit cards, car loans)
  • No delinquencies
  • More income than debt
  • Savings in retirement, investment or savings accounts
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8.99% - 29.99% (with discounts)

Pricing Disclosure

Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

24 to 84 months

$5,000 - $100,000

680

Pros
  • Funding as soon as the same day
  • Upfront fees are optional
  • Check rates without impacting credit
Cons
  • Loans start at $5,000
  • More competitive starting rates available

What to know

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If you need to cover at least $5,000 in funeral expenses, it’s worth checking your rates with SoFi. When you prequalify for a loan, SoFi allows you to see what rates you qualify for without damaging your credit. And if you need money ASAP, you may be in luck — SoFi will send your loan money as soon as the same day you’re approved.

Note that SoFi’s starting rates are higher than other lenders’ rates on this list, so borrowers with excellent credit may qualify for lower rates elsewhere.

Read our full SoFi personal loan review.

How to qualify

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To get a loan with SoFi, you’ll need to meet these eligibility requirements:

  • Minimum credit score: 680
  • Be at least the age of majority in your state
  • Be a U.S. citizen, permanent resident or non-permanent resident (e.g., asylum seekers and DACA recipients)
  • Have sufficient income from employment or other sources, or have a job offer that starts within 90 days
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9.99% - 35.99% (with discounts)

24 to 84 months

$1,000 - $50,000

580

Pros
  • Qualify with fair credit
  • Loans start at $1,000
  • Check rates without damaging credit
Cons
  • Charges upfront administrative fee and late payment fee
  • High maximum interest rate

What to know

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While Upgrade loans come with less competitive interest rates than other lenders on this list, they could be a solid choice for borrowers with fair credit who can’t qualify for a loan with low rates. You can check your rates on an Upgrade funeral loan by prequalifying, which won’t impact your credit score.

Borrowers with fair credit may be subject to Upgrade’s high maximum annual percentage rate (APR), and all borrowers will need to budget for fees. Upgrade charges an upfront origination fee, which runs from 1.85% - 9.99% of the cost of the loan.

Read our full Upgrade personal loan review.

How to qualify

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In order to get a loan with Upgrade, you’ll need to meet these requirements:

  • Minimum credit score: 580
  • Be a U.S. citizen or permanent resident or have a valid U.S. visa
  • Be 18 years old or older (19 in Alabama and certain other states)
  • Have a bank account
  • Have an email address
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7.40% - 35.99%

36 or 60 months

$1,000 - $50,000

300

Pros
  • Qualify with bad or fair credit
  • See rates without damaging credit
  • Loans start at $1,000
Cons
  • Charges an upfront origination fee and late payment fee
  • Limited loan term options

What to know

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If you’re having trouble qualifying for a funeral loan because you have bad credit, Upstart is an excellent alternative to a payday loan. You can finance as little as $1,000 for rates that fall under the 36% APR threshold that financial experts consider affordable.

Keep in mind that you’ll only have two choices when it comes to loan terms with Upstart — 36 or 60 months. Upstart loans come with a one-time origination fee of 0.00% - 12.00% of the total cost of the loan.

Read our full Upstart personal loan review.

How to qualify

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To get a loan with Upstart, you’ll need to meet these requirements:

  • Minimum credit score: 300
  • Have a verifiable Social Security number
  • Be 18 years old or older
  • If you don’t have a credit score, you must have a degree from or be enrolled in an eligible degree-granting program
  • Have a job, job offer that will start within six months or a source of income
  • Have a U.S. address
  • Have an email account
  • Have a banking account at a U.S. bank
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What are funeral loans?

A funeral loan is a personal loan used to cover burial expenses. You can use these funds to pay for funeral home services, burial, cremation or any other expense you may incur while putting a loved one to rest.

Like all installment loans, the funds from a funeral loan will be delivered to you in one lump-sum payment. You can then use those funds to cover your loved one’s funeral expenses as you see fit. Then, when your repayment period begins, you’ll repay what you’ve borrowed over a series of regular monthly payments.

Although there are sometimes fees associated with taking out a personal loan, the interest rates are typically more affordable than if you were to charge the same amount on a credit card.

On this page:

What are the costs associated with funeral loans?

Before you move forward with applying for a personal loan to cover funeral expenses, it’s a good idea to break down how much the loan will cost you. Here are common personal loan fees to consider:

  • Origination fees: Origination fees are charges imposed by the lender to cover the administrative costs of generating a new loan. These fees are typically expressed as a percentage of the loan amount and can be as high as 12%.
  • Interest charges: Interest is included in your monthly payments as a fee the lender extends in exchange for borrowing money. The interest rate you’re given will depend on your credit score. However, as of the time of writing, the average 24-month personal loan interest rate is 12.49%, according to the most recent data from the Federal Reserve.
  • Prepayment penalties: Not many lenders charge prepayment penalties anymore, but this is a fee for paying off the loan early. If a lender does charge this fee, it’s typically either expressed as a flat charge or as a percentage of the remaining loan balance.
  • Late fees: Some lenders charge late fees on payments received after the due date. For instance, SoFi does not charge late fees, while Discover charges a $39 fee for each occurrence of late payment.
 How much does a funeral cost?

According to the National Funeral Directors Association (NFDA), the median funeral consisting of a viewing and a burial cost $8,300 in 2023. Meanwhile, funerals with cremation had a median cost of $6,280.

Should you take out a loan to cover funeral costs?

Like any financial decision, taking out a loan for funeral expenses has its pros and cons. Here’s more information on what to consider as you weigh your options:

ProsCons

 Provides access to necessary funds: If you can’t afford to pay for funeral costs out of your savings or emergency fund, taking out a loan to cover the cost can help you access the money you need quickly.

 May help improve your credit score: If you can keep up with your monthly payments, paying back an installment loan can actually help you improve your credit score over time.

 Can reduce stress: Planning a funeral is stressful in its own right, but applying for a loan can help you stop worrying about where the money is coming from.

 Creates more debt: Taking on more debt can have potentially negative consequences if you’re unable to keep up with your payments, including causing your credit score to drop.

 May involve paying high interest rates: While bad credit loans do exist, you may be subject to higher interest rates if you have a lower score.

 Encourages sole responsibility: Unless you apply with a co-borrower, taking out a personal loan leaves you solely responsible for paying it back. If your circle is large enough, it may be worth looking into alternative options, like crowdfunding, where you can share the cost burden.

Tips for taking out funeral loans

If it seems like a funeral loan, might be the best choice for you, here are a few tips to help you get the most bang for your buck.

  • Research funeral costs: The Federal Trade Commission (FTC) offers a handy funeral pricing checklist that you can use to estimate costs and compare prices.
  • Get estimates from different funeral homes: Prices for services may vary depending on the funeral home. Be sure to visit a few different establishments and gather estimates to increase your chances of finding a provider in your price range.
  • Check your credit score: Some lenders publish the minimum credit score that they will accept for a personal loan on their websites. By choosing a lender where your score aligns solidly with its acceptable credit score range, you can increase your chances of being approved for a loan.
  • Shop around for a loan: Collect prequalification offers from multiple lenders before applying for a loan. Doing so can help you save money on interest charges and find terms that work well for you. Just be sure to give each lender the same information so that you can make an apples-to-apples comparison once you have the offers in hand.

Alternatives to taking out a funeral loan

If taking out a funeral loan is not the right choice for you, don’t worry. There are alternative options available, including:

Life insurance

Life insurance policies are designed to cover end-of-life costs, including funeral expenses. Before applying for any funeral loans, it’s worth checking if your loved one held a life insurance policy.

Since the average payout can vary widely, it can be hard to guess how much you’ll receive. For instance, in Alabama, the average policy is $66,000, while in California, it’s $282,000. However, regardless of where you’re located, the amount should be enough to cover at least some of the funeral costs.

Funeral home financing

While you may be able to find more affordable rates with online lenders, many funeral homes offer their own financing options. The funeral home typically works with a partner lender that can help you secure a funeral payment plan.

Since each funeral home may have a different partnership arrangement, it’s important to ask questions about each one’s funeral home payment plans and to make sure you can comfortably repay them before signing on the dotted line.

0% APR credit cards

As the name suggests, 0% APR credit cards offer an introductory rate period where you can pay down your balance without accruing any interest. If you’re confident that you can pay off any remaining funeral expenses before your introductory period ends, this financing method can be a smart way to save on interest charges.

However, there is some risk involved. If you’re unable to pay off your balance in full before the introductory rate period ends, you’ll likely be stuck with a much higher interest rate than you’d find with a personal loan.

Frequently asked questions

According to Titan Casket, graveside funerals cost between $3,000 and $4,500 on average. These funerals tend to cost less than services conducted at a church or funeral home.

If you can’t afford to pay for a loved one’s funeral expenses up front, it’s entirely possible to finance the cost. You can do so by taking out a funeral loan, opening up a 0% APR credit card or exploring individual funeral home financing options.

Since repaying a personal loan typically involves agreeing to a monthly repayment schedule, it is very possible to pay monthly for a funeral. That said, you’ll have to check with your lender to see what specific repayment terms it offers.

How we chose the best funeral loans

To choose the six best loans for funerals, we systematically reviewed and rated 30 of the top lenders nationwide. We prioritized lenders with fast funding timelines, given the often urgent nature of funeral financing. Then, we selected the top loans based on the following criteria:

  • Accessibility. Lenders earned points for making the application and funding process quick and seamless, and for making loans available to nontraditional borrowers (e.g., borrowers with low credit scores, cosigners and noncitizens). We excluded lenders that only offer loans to members (e.g., credit unions).
  • Rates and terms. We rated each lender based on the competitiveness of its interest rates and terms. Lenders with low interest rates and flexible term lengths and amounts received high marks.
  • Repayment experience. We turned to reputable third-party sources like Trustpilot and the Consumer Financial Protection Bureau to assess customer satisfaction. Lenders with unique perks, customer resources and extended customer service hours received additional points.

According to our standardized rating system, the best funeral loans come from Discover, LendingPoint, LightStream, SoFi, Upgrade and Upstart.