Payment in installments and deferral by the funeral director
In the event of an inheritance or a life insurance payment that is certain to be expected, relatives do not necessarily have to take out a loan for the funeral costs, since most funeral companies are willing to defer payment in such cases, for which they either charge little or no interest; in some cases, the interest is only calculated on designed external costs.
However, only a few morticians offer long-term installment payments, so that the bereaved mostly have to contact a bank for borrowing. In many regions, a coffee table is customary on the day of the funeral and is paid for directly in the restaurant, although it is rarely possible to defer payment.
The billing of further costs such as the amounts for the flower arrangement and the cemetery fees can be handled as a service by the undertaker. This procedure is useful if you need to borrow funeral expenses because the bank can be provided with a complete estimate.
Take credit for the funeral through a bank
Even people with a poor credit rating can easily borrow for funeral expenses, provided they can provide the bank with expected payments from an inheritance or insurance contracts. In this case, the financial institution secures the loan amount by assigning the corresponding payments up to the amount of the funeral loan.
If no inheritance or insurance benefits are to be expected, the approval of the application for a loan for funeral expenses is based on the creditworthiness of the borrower. In such a case, however, smaller financial institutions are more willing than large direct banks to lend despite their poor creditworthiness, as they perceive the special situation of the bereaved in addition to economic aspects.
However, the bank is obliged to partially offset an increased default risk with an above-average interest rate. A loan for funeral expenses is easy to obtain on personal loan brokerage websites because private lenders agree to pity lending to survivors.
Is there government aid?
If neither the assets of the relatives nor the expected inheritance including any insurance benefits are sufficient for a decent funeral, a loan for the funeral costs can be applied for through the social welfare office. When it comes to lending, the municipality has a lot of leeway; however, if the loan application is rejected, they must pay a simple social funeral without a claim for reimbursement.