The NFDA recently released a report showing that for many, funeral planning is not a priority. Unfortunately, this means that many families haven’t considered the expenses involved.
With 57% of Americans lacking the money needed to cover a $500 unexpected expense, financing is becoming an increasingly popular payment choice. How can a family tell if funeral financing is the right decision for them? Below are some common reasons why a family would consider it as the right choice.
Faster and Easier Than Ever
Financing today has gotten a lot faster. Families that apply online get notified of approval typically within minutes. A family can then pay for the funeral immediately while they wait for a life insurance payout or reallocate their other assets. For example, let’s say the family wants to sell the car of the deceased to help pay for a part of the funeral. Selling a car could take months. By using a financing program, they can pay for the funeral up front, and pay off the rest of the loan when the car is sold.
Keeps Family’s Emergency Fund
More than half of Americans (69%) have $1,000 or less in savings. 11% have between $1,000 and $5,000. Here, financing makes sense. Let’s say the family wants to keep part of their emergency fund instead of using it all on the funeral. They can pay for part of the funeral and simply finance the rest.
Fixed Payments and an End Date
For seniors or families living on a fixed income, financing makes sense. Fixed monthly payments can be more easily factored into the budget, and families will have a set date when those payments will end. Remember, 57% of Americans can’t afford a $500 unexpected expense. Paying fixed monthly payments is easier on their monthly budget, and leaves families with more financial flexibility. And with a set end date for the payments, budgets can be adjusted accordingly.
Cheaper and Lower Interest Rates
If the family is already set on financing, using a direct funeral financing program like Tribute Loans makes more sense than other financing options. Financing on credit or with personal loans can have interest rates that range from 10 to 23%. With rates as low as 4.99% APR (depending on FICO score and other factors), Tribute Loans is the way to go for many families.
A financing program also offers flexibility. Whether a family is waiting on a life insurance payout or reallocating their assets, financing allows them to access the funeral options they want for their loved one. This means they can choose the memorial options that have the most meaning to them, instead of opting for something like direct cremation to save money.
Gives Family More Time to Focus on Funeral
Another reason families consider financing is that it allows them to focus on planning the funeral. It means more time to grieve and heal, and less time worrying about finances.