If you are looking an online funeral loan, Gathered Here offers 3 months’ interest-free finance through zipMoney.
When a loved one passes away, the last thing anyone wants to think about is money, yet the reality is that funerals are expensive. In Australia, the average cost of a cremation is $7,420 and the average cost of a burial is $19,000 (including all cemetery fees).
For many, organising this amount of money in a short amount of time can be difficult or may simply not be possible. Even for those who can personally pay for funeral expenses out of savings, it can be a strain to individual finances. In these circumstances, you might consider a funeral loan to help pay for funeral expenses.
This guide is designed to step you through the different options available when seeking a funeral loan, how to compare products, and the various risks involved.
We cover the following topics:
In addition to these funeral expenses, it’s critical to account for the cemetery fees – including both the right of interment (i.e. the burial plot) and the interment fee (i.e. the digging fee) – which make up a significant part of the overall cost.
For more information on funeral expenses, see our Guide to Understanding Funeral Costs in Australia.
If you’re wondering who’s responsible for paying these expenses and whether they can recover the cost of the funeral from the deceased’s estate, see our article on Who Pays for a Funeral?
When you apply for a loan, you are taking on debt. In most cases, this means you will be paying interest on the amount you borrow.
You should carefully consider the following factors before applying for a funeral loan:
There are 3 main ways you can borrow money to pay for a funeral:
Each has certain characteristics you should be aware of.
A personal loan is money borrowed from a financial institution for a personal expense, such as a car, holiday, or – in this case – a funeral.
Personal loans typically have the following characteristics:
Personal loans are either secured or unsecured:
Generally speaking, you will be able to get a lower interest rate under a secured funeral loan. However, it also means that should you be unable to repay the loan, the bank or financial institution will sell your pledged asset(s) to settle the debt.
A payday loan is a high cost, short-term loan that derives its name from getting the borrower through to their next “payday”.
Payday loans typically have the following characteristics:
Payday loans typically target sub-prime consumers – i.e. individuals who have bad credit scores and who may have difficulty repaying the debt.
While the allure of instant approval without a credit check is appealing, these loans have very high rates. In Australia, the fees and charges on payday lending are capped at a one-off establishment fee of 20% of the amount loaned, and a monthly account keeping fee of 4%.
Further, if you fail to make a repayment, you can expect to be charged expensive default fees. In Australia, a payday lender can charge defaulting consumers up to 200% of the total loan amount (including any repayments and default fees already paid).
Caution: Consumers who turn to payday loans can easily fall into a debt spiral, where they are unable to keep up with repayments and growing default fees. Due to the risk involved with these loans, it should be kept in mind that there are often alternatives to borrowing to pay for a funeral. See our Guide to Funeral Assistance in Australia for more information.
In more recent years, “buy now, pay later” finance has become available at a growing number of merchants across Australia. Under some of these finance options, the consumer pays no interest which is instead paid by the merchant. Merchants willingly agree to do this as offering buy now, pay later finance increases their overall sales.
Gathered Here has partnered with zipMoney – a buy now, pay later solution – to enable customers to purchase funerals on interest-free finance from participating funeral directors. This funeral loan has the following characteristics:
Important Note: Buy now, pay later finance on Gathered Here is generally only approved for prime, near prime and emerging prime consumers (i.e. consumers who are likely to be able to repay the loan). We do not promote the practice of lending money at high interest rates to those who are unlikely to be able to repay.
For more information on how to purchase a funeral on 3 months’ interest- & fee-free finance, click here.
When it comes to funeral loans, there are dozens of different options available for you to choose from. To help you compare funeral loans, we have set out the key features to be aware of and some comparison calculations below.
The key features that differ between funeral loans are:
While there a number of features that consumers look for in a loan, the cost of the loan is often a key consideration.
Below we compare how much it would cost to borrow $2,000 for 3 months through a payday loan and our buy now, pay later finance option. (Note: We have not included a comparison with a personal loan, as these loans are not normally taken out for 3 month terms.)
Assuming in both scenarios that repayments are made on time, our buy now, pay later option works out to be completely interest-free and fee-free, whereas the payday loan incurs rates and fees totalling $640 (or 32% of the loan amount).
|Buy Now, Pay Later Finance||Payday Loan*|
|Term||3 months||3 months|
|Total Monthly Fees / Interest||$18||$240|
|Rebate on Fees||-$43||-$0|
|Total to be Repaid||$2,000||$2,640|
(*These calculations are based on the maximum amounts a lender is permitted to charge under law.)
To apply for a funeral loan you will need to be over 18 years of age and an Australian citizen or permanent resident.
Depending on the type of loan you are applying for, you will generally need to show a combination of the following:
Some alternatives to funeral loans include:
For more information, see our Guide to Funeral Assistance.
Whether you can repay early depends on the terms of the particular loan. Some fixed loans, for example, do not allow early repayment or will trigger a termination fee for early repayment.
Yes, while most personal loans will require you to speak to consultants and submit lengthy documentation, some loans can be sought and approved entirely online.
If you need an emergency funeral loan, you have several options:
Our buy now, pay later option is interest-free and offers a full rebate on all fees (provided you are able to repay the credit within 3 months).
We hope you have found this guide to funeral loans helpful. If you have any questions about our buy now, pay later funeral finance, please don’t hesitate to get in touch with us at email@example.com or start a live chat by clicking the floating message box in the bottom right corner of your screen.
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