Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed quarterly, when the underlying data is restated.
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.
A funeral loan is ordinary borrowing used to pay a funeral account. In New Zealand some funeral directors partner with a finance company, and families can also use a personal loan or credit card. Borrowing adds interest and fees on top of the funeral cost, so check the options that do not create debt first: releasing money from the deceased's bank account, the Funeral Grant, ACC or a smaller funeral. As at 20 October 2026.
The person who arranges the funeral is usually the one the funeral director looks to for payment, and a bill of several thousand dollars can arrive before probate, a grant or a bank release has happened. FDANZ's 2026 member survey gives an average of $11,700 for a full cremation funeral and $4,700 for an unattended cremation (FDANZ). A loan can bridge the gap between the bill and the money, but it is a contract with a lender, not a funeral benefit, and it stays yours if the money never arrives. We did not find a published interest rate for funeral lending to quote, so this page does not give one. It sets out where finance is offered, what to ask, and the routes to try first. It is general information, not financial advice.
What funeral finance looks like
Some funeral homes work with a finance provider. Davis Funerals in Auckland, for example, says it offers finance through Gilrose Finance: "Pay no interest for 3 months", with a quick decision. The page gives no rate, fees or limits and refers readers to the finance company for "full details of this, including all fees and repayment details". Davis also advises applicants to seek financial advice before applying for a loan (Davis Funerals, read 20 October 2026). That is one provider's offer, not a market survey. Interest-free periods end, and after them the contract's rate applies.
Other routes are a bank personal loan, a credit card (see our guide to paying funeral costs by credit card), or borrowing from family. Each is borrowing. For a funeral director's own instalment arrangement, see funeral payment plans, which is a different question.
Try these before you borrow
Option
What it does
Limits
Bank release
The bank can release money from the deceased's account to pay for the funeral, and you do not need to be the executor or wait for probate (govt.nz)
The bank decides; needs money in the account
Small-sum payment (Administration Act s65)
Banks, super funds, employers and others may pay sums up to $40,000 without a grant to listed relatives. Section 65(3) lets them pay funeral expenses, or refund whoever paid, where no one has applied under s65(2) (Administration Act 1969)
The payer "may", not "must"; the $40,000 applies per payer, from 24 September 2025
Money in the deceased's account can also be reached through the estate. The executor can apply for probate, which is a High Court order confirming the will; the fee is $275 (Ministry of Justice). The process takes time, so see probate in NZ. Funeral expenses rank second among an insolvent estate's debts, after the costs of administering it, and section 65(3) allows a payer to refund whoever paid the funeral expenses; keep every receipt.
Questions to ask before signing any credit contract
What is the total I will repay, not just the monthly amount?
What is the interest rate after any interest-free period ends?
What fees apply to set-up, late payment and early repayment?
Who is the borrower? If you sign, the debt is yours, not the estate's.
Is the loan secured against anything, such as a car or house?
What happens if the Funeral Grant or an estate payment arrives later? Can I repay early without a penalty?
Is there a cooling-off period or a way to cancel?
If any answer is vague, do not sign that day. Our guide to paying for a funeral compares seven ways to pay, and a Community Law centre can give free initial legal advice (Community Law Manual).
A worked example
Suppose a funeral account is $9,000 and you expect $2,697.43 from the Funeral Grant, so about $6,300 is not covered. The numbers are illustrative, not a quote. Borrowing the shortfall costs whatever the lender's contract says on top of $6,300, so a smaller funeral, a bank release or the estate paying could reduce what you need to borrow before you start. Ask the lender to put the total repayable in writing, and compare that with the cost of the plainer option. The grant's amount and the funeral's cost both vary, so rerun the sum with your own figures.
Planning ahead
The reason many people look at funeral loans is that nothing was set aside. Saving, a prepaid plan or funeral insurance are ways to avoid it. One insurance product is Momentum Life's Funeral Insurance, issued by Momentum Life Limited: ages 40 to 75, no health questions, a fixed benefit of $3,000 to $30,000. Only an accidental death is paid in the first 24 months (other deaths get the premiums back), the premiums can end up larger than the benefit, and the benefit may not cover the whole funeral. Momentum's A.M. Best rating is B (Fair) (financial strength). See funeral insurance for the alternatives; the buttons on this page lead to Momentum's quote.
Adviser's view
Borrowing for a funeral should come after the options that do not create debt: releasing money from the deceased's bank account, the Funeral Grant, ACC or a smaller funeral. If you still borrow, treat it like any credit contract. The funeral directors we found that offer finance say to seek financial advice first, and we did not find a published rate to quote, so ask for the full cost in writing.
Henry Smith, Financial Adviser (FSP1010699). General information, not personalised financial advice.