For heirs and communities of heirs, the loan for funeral expenses is becoming an increasingly common issue. Young people are torn from life and did not have the chance to make provisions themselves. Older people see the problem coming up, but the pension is not enough for big savings.
Our funeral advice on the funeral costs answers the most common questions of the bereaved and offers solution options that match the individual death.
Credit for funeral expenses – difficult duty
Immediately after the death of a close relative, nobody thinks about the loan for the funeral expenses. This is not necessary either. The first days are goodbye. The most important support for organizational questions about the process is the undertaker on site. Basic information about the planned funeral is sufficient for his work.
However, the relatives lay the basis for the later calculation. You choose the coffin, decide on the type of burial and burial site. In addition, the scope of the burial ceremony largely determines how high the expected bill will be.
The deceased family member’s wish regarding the size of the funeral should be the lead in planning the funeral. Most people who left life without large reserves want a simple ceremony in the closest family circle. A simple coffin and a small grave not only show the humility of many people on the last way.
As hard as it sounds, the majority of people whose end is in sight wish to set the red pencil on funeral expenses. It is crucial for the wish not to burden the loved ones financially. You want to avoid getting a loan for funeral expenses.
How much does a funeral cost in Germany?
Nobody volunteers to die. Death is discussed at most on a spiritual level. A funeral is expensive, most people do not have a clear idea. The exact cost of a funeral in Germany depends on the place of burial. Prices for the last resting place differ significantly from region to region.
The undertaker can provide a rough overview of the costs in the preliminary discussion. He knows the prices for a burial site from his professional experience and can outline the cost framework for the total costs quite precisely. Serious funeral directors are not in a hurry when it comes to the loan for funeral expenses. With their calculation, most of the undertakers can wait long until after the will has been opened.
Regulate the estate – then finance the difference
Whether community of heirs or an individual beneficiary, only after the estate has been settled can a serious assessment of the credit needs be made. If the remaining spouse takes over as sole heir, the undertaker’s invoice amount is quickly determined as a funeral loan. Inheritance communities usually only realize the material legacy by selling objects in order to determine the loan amount.
Communities of heirs can expect a problem-free loan approval for the funeral expenses. Several applicants apply for the loan together. The creditworthiness for lending, given the average creditworthiness of the German population, is practically always sufficient in this case. The loan for the funeral costs would be applied for at low interest rates via a credit comparison calculator. Loans up to the medium order of magnitude would currently be financially less than 4 percent APR. (As of April 2016).
It is more difficult for the partner as successor to the testator with his loan for the funeral expenses. A sale of the existing valuables to cover the costs is practically impossible. Support from the state, as in past times, should also not be expected. Paradoxically, the “welfare state” has no money for this. Usually only the pension income remains as the basis for financing requests. This is where it gets difficult.
Funeral loan problems and possible solutions
The problem when older people die and the partner has to pay for the funeral is – lack of creditworthiness for lending. From two pensions, couples can just shoulder the running costs of housekeeping together. If a pension ceases to exist, it becomes financially bitter. The average pension is not sufficient as proof of income for the approval of average loan amounts. It is attachable and offers no security whatsoever.
Regular bank credit would be possible if the children step in as guarantors or co-applicants. Neither age limits nor too little attachable income block the loan for the funeral expenses together with a solvent co-applicant. It would also be fair if the children agreed to repay the loan in real terms. Living on a survivor’s pension is a feat, and repaying a loan is an unreasonable hardship.
The second option for solving funeral expenses would be to apply for a loan to a private lender. Private lenders could be approached at a serious level via Astro finance or Best Bank. Again, it is problematic to prove the actual ability to repay the small remaining pension. But pledging and age are not absolute grounds for refusing credit for private investors, as is the case for commercial lenders. The funeral loan can be approved despite a small pension, since investors are not bound by legal and internal regulations.
Interpersonal relationships as a credit factor for lending
In contrast to the bank’s clerk, private investors are free to choose their investment. At an interpersonal level, the loan decides on the funeral expenses from a private person.
If enough bidders show sympathy for the difficult situation and trust the repayment will of older people, bids are received. Each bidder finances only a small part of the amount. As soon as sufficient bids have been collected and accepted, the funeral loan will be paid out.