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Compare funeral loans
Get the funds you need to give your loved one the farewell they deserve.
The passing of a family member or friend can be an incredibly difficult time, but the unfortunate reality is that a funeral can also place a significant financial burden on those left behind. Depending on the final arrangements, the costs can cause a strain on your bank account when you’ve still got other financial obligations. To help you cover the cost of giving your loved one a proper farewell, you may want to consider a personal loan.
Many people underestimate or simply don’t even think about how much funerals cost. According to research done by InMemory, a Canadian funeral service resource database, the average cost of a funeral in Canada in 2019 was around $12,900. But the cost can vary widely based on many factors like choosing a traditional funeral service and burial versus simple cremation. Here is a breakdown of the four major categories of farewells and their average costs across Canada.
(burial, embalming, visitation, service)
(burial, service at cemetery)
|Cremation followed by memorial service||Direct cremation|
The costs above reflect data gathered from British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. To view the breakdown of average funeral costs in each of these provinces click here.
Here are common funeral expenses that you need to consider:
- Funeral director fees for their professional funeral planning services
- Transport for the deceased to a funeral home
- A hearse to transport the coffin to the burial site or funeral location
- A coffin or casket
- The death certificate
- Preparing the body for viewing, burial or cremation
- Cemetery and crematorium fees, including the cost of a burial site
- A headstone
- An urn for cremated remains
- Newspaper notices or an obituary
- A celebrant or clergy
- Memorial cards
- Refreshments for the wake
How do funeral loans work?
A funeral loan works by breaking up the cost of the funeral into installments so you don’t have to pay it all at once. Generally, you’ll take out the loan with a private lender and use the money to pay the funeral home. Then you’ll repay the loan each month in installments — plus interest and fees.
You can get a loan to pay for a funeral at a bank, credit union or online lender. Some funeral homes also offer financing themselves — though it’s usually through a partner lender and doesn’t always come with the best rates.
Online lenders can get you funds within a few days and tend to have more flexible eligibility requirements. But they often come with higher rates than your typical bank or credit union. You can apply online and if approved, you’ll typically receive your funds within one or two business days. Once the money is in your bank account, you can pay for the necessary expenses.
Depending on how much everything costs and how much of your own savings you plan to use, you may want to consider budgeting the funeral expenses before applying for a loan. You’ll pay interest on the amount you borrow, so it’s best to only apply for the amount you actually need.
How much does a funeral loan cost?
It depends on how much you borrow, your rate and loan term. To qualify for the lowest rate, you’ll G=generally need near-perfect credit, few other debts and a high income. If you have bad credit, you might struggle to qualify at all. To get a lower rate, you might want to back your loan with collateral.
Use the calculator below to see how much a funeral loan would cost each month and in total based on amounts, rates and terms.
Pros and cons of borrowing to pay for a funeral
- You can get the money you need to give your loved one the farewell they deserve
- You get quick access to funds
- You have the convenience of splitting the cost of the funeral into regular repayments, rather than one large lump sum
- You don’t have to drain your savings account
- Borrowing money is risky
- You’ll need to pay extra for things like interest charges and fees
- It can be easy to overspend if you have access to a large loan amount
Consider the following factors when comparing different loans:
- Turnaround time. You may need urgent access to funds in order to pay funeral costs as soon as possible, so make sure to consider the speed in which a lender assesses applications and transfers the loan amount to you.
- Secured or unsecured. Will you need to offer any collateral as security for the loan? While a secured loan offers better interest rates and lower fees, don’t forget that if you fall behind on repayments the lender could seize your collateral.
- Interest rate. Compare interest rates across a variety of loans to work out how much your regular repayment amounts will be. Compare fixed- and variable-rate loans to find what your best option is.
- Fees. Read the loan terms and conditions to see if there are any application fees, origination fees or ongoing charges that apply – as well as the penalty charged if you miss a repayment or decide to pay your loan off early.
- Repayment schedule. Can you tailor the repayment schedule to suit your income and budget? Is the regular repayment amount something you can realistically afford each month?
- Loan terms. Loans with short repayment terms are paid off quickly but require larger monthly repayments, while loans with longer terms have smaller repayment amounts but could end up costing more with interest in the long run.
Prepaid funeral plans
Many funeral homes offer prepaid funeral plans, which allow you or a loved one to pay for the costs of a funeral ahead of time in installments. This can offset the immediate cost to your family, allow them more time to grieve and ensure that you get the type of burial you prefer.
You’ll need to check that you’re eligible for the loan you’re interested in before applying.
You will typically need to meet the following criteria:
- Be at least 18 years of age, or the age of majority in your province or territory
- Be a Canadian citizen or a permanent resident with a valid Canadian address
- Meet any income requirements
- Meet any credit score requirements
- Have a working bank account
You will usually need to provide the following information:
- Provide your name, date of birth, contact details and proof of ID
- Specify the loan amount and what you will use the loan funds for
- Supply documents proving your employment and income
- Provide details of your assets and liabilities
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