Losing a loved one means an exceptional emotional situation, which is also associated with high financial costs. You want to say goodbye to people with dignity and only the best is often good enough. But the funeral costs quickly amount to several thousand dollars and there is not always so much cash available.

Few companies have specialized in arranging a funeral loan to a bank, negotiating special rates for customers. Most funeral directors, however, do not participate in the brokering of credit and do not grant any payment options. In many cases, a loan is required for the funeral.

Bank loan for the funeral

Bank loan for the funeral

The savings are often not sufficient and the relatives have to take out a loan for the funeral. If real estate is part of the legacy, it can be regarded as loan collateral. In other cases, the borrower does not have to disclose that the loan applied for is required for a funeral, as many loans have the credit available for use. If there is no credit balance and no bank loan can be taken out, the social welfare office in many cases grants the relatives a request for the funeral expenses.

This is an optional provision, but the social welfare office is obliged to at least cover the costs of a simple funeral. The applicant does not have to be a welfare recipient for this. Lender company recipients can contact the job center for the loan. The loan for burial by the social welfare office or job center is free of interest and is particularly intended for relatives with a poor credit rating.

A surety or collateral can be helpful when applying

A surety or collateral can be helpful when applying

A good way to get a funeral loan is to provide a guarantor. Even if the borrower is negative, the chance of a loan approval is significantly increased. The guarantor reduces the credit default risk for the bank significantly, because the guarantor undertakes to pay the installments due if the borrower defaults. It is therefore important that the guarantor’s creditworthiness is very good and that he has a sufficiently high income. If the borrower still owns valuables, such as a property or life insurance, this can also be deposited as security.

The further alternative – personal loan

The further alternative - personal loan

If all efforts have failed, a personal loan offers another possibility for approval. You can first ask in a private environment whether someone could lend the required amount. The advantage within the family would be that the loan for the funeral is usually granted without interest. However, if you take this step, you should write down the formalities, because many families have already broken up because they were fighting over money.

This cannot happen in the case of a contract, because both parties confirm the loan amount, the monthly installments, any interest etc. with their signature. Many private individuals now lend their money to people in need. As with any loan, it is important to carefully review the offers in order to get a cheap loan with fair terms.