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Medical Loans & Financing Options
Whether you’re for the US healthcare system or against it, there’s no denying that a medical emergency can come with the added stress of worrying about how you’re going to pay for your treatment. While having health insurance can certainly help you manage these expenses, it’s not a guarantee that there won’t be anything to pay.
Your financial situation should never be a barrier to getting quality health care, and so a medical loan can be there to help you make the costs more affordable.
Applying for medical financing is fast and easy:
Compare Your Personal Loan Options
What is a medical loan?
In most cases, a medical loan is an unsecured personal loan you get to cover medical costs, but there other options available which we’ll cover shortly.
How does a medical loan work?
A medical loan is usually a lump sum you borrow from a lender and is deposited in your account so you can pay for your medical bills. In some cases, a medical loan may pay the hospital (or other medical business) directly. You then pay the loan back (plus interest) with a monthly payment until the full amount has been repaid.
Which lenders offer medical loans?
✔ Minimum Credit Score: 550
✔ APR: 9.95 - 35.95%
✔ Loan term: 2 - 5 years
✔ Funding turnaround: within 24 hours in most cases
With Avant personal loans, borrowers with fair to good credit scores can get access to super fast funding up to $35K. Best for debt consolidation.
✔ Minimum Credit Score: 580
✔ APR: 9.99-35.99%
✔ Loan term: 2 - 4 years
✔ Funding turnaround: as fast as within 24 hours
With LendingPoint, borrowers with fair credit can obtain a loan between $2,000 - $36,500 and get funded within 24 hours. Origination fees may apply.
What are the pros and cons of medical loans?
- You can seek medical care confidently if you haven’t yet due to financial concerns
- Repayment terms are often long
- Loans are funded quickly – often same-day
- Some are flexible, so you can use the money for any expenses during your recovery
- Interest rates for those who have struggled in the past (and so have a poor credit rating) is high – up to 35% and sometimes even more
- Some charge additional fees that make them take longer to repay
- You may not be able to borrow enough to pay the full amount of your bills
What can medical financing be used for?
You can use medical financing for both necessary and elective treatment, such as:
- Cosmetic surgery
- Hair replacement
- Long term care or hospital stays
- Physical therapy
- IVF treatment
- Weight loss surgery (such as gastric bypass)
- Dental procedures
- Any fees and excesses you have to pay that your health insurance provider won’t cover
Calculate monthly payments on a medical loan
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Are there any alternatives to medical loans?
You may find that a medical loan doesn’t suit your circumstances. Here are some other options that may be a better fit for you:
- Credit cards: if your bill is relatively small, a credit card can be a great way to spread the cost, especially if you have good or excellent credit and so can get a long 0% APR period. Just be aware that interest rates can be as high as medical loans after this period, or for anyone who can’t get a 0% APR card.
- HSA or FSA: Health savings accounts and flexible spending accounts are sometimes available through your employer or health insurance provider so you can pay off outstanding medical bills. When you use these services to pay for your medical bills, you will often get a discount.
- 401(k) loan: You can take a loan from yourself out of your 401(k), provided you don’t want to use your 401(k) within the next 5 years (or you may be penalized). These loans are limited to $50,000 and have a 5-year repayment period.
- Payment plans: Many medical providers provide payment plans for essential treatment, and some for non-essential treatment, so ask your medical provide what is available to you. Some providers will require a down-payment followed by monthly payments, while others will set up a monthly payment plan for you. Make sure you’re aware of any interest rates and additional fees before you agree to your plan.
- HELOC: A home equity line of credit (HELOC) allows you to open a line of credit secured against your home. This works much like a credit card, where credit becomes available to you again once you’ve paid it off, so can be a good option if you’re not sure yet the total cost of your care. These usually have lower interest rates and offer more credit than other options, but you may have your home taken from you if you don’t keep up your repayments.
- Friends, family, & crowdfunding: Don’t be afraid to turn to friends and family if you’re in a tight spot and need—or have had—essential care. They may be willing to help you pay off or manage the costs of your debt. Crowdfunding is another good option, and sites like GoFundMe will allow you to share your story and allow friends and well-wishers to anonymously donate to help you pay your bills.
- Consider financial assistance: if you are going to struggle to meet your repayments, there is no shame in asking for help and we would encourage you to look into free and low-cost healthcare options available to you. There are many financial aid programs offered by hospitals to ensure you get the care you need. You often need to meet certain criteria to qualify, but don’t write yourself off before you apply.
Can I get my medical bills reduced?
In some cases, you can get your medical bills reduced, so it’s always worth seeing what you can do before you get a payment plan in place. Here are some options:
- Negotiate a lower payment: It’s easy to feel like a victim when you cannot afford large medical bills, but remember that you’re not powerless. Try talking to your hospital if you don’t qualify for financial aid and tell them about your financial situation to see if they can reduce your bill.
- Ask about a discount if you’re uninsured: Some hospitals will discount their rate if you are uninsured to make it more affordable, so make sure you ask if they offer any reductions for uninsured people.
- If you have almost enough to pay, offer to pay it off in one: This option certainly isn’t for everyone, but if you have the cash to pay almost the entire bill, talk to your hospital to see if they’re waive the remaining amount if you pay it off now, or if they can help you with a payment plan for the remaining amount.
- Dispute high rates and inaccuracies: It’s easy to panic when you get your medical bill, but once you’ve gotten over the shock, sit down and find out what everything on your bill should cost and if it seems high, question them on it. There are also stories out there of people asking for an itemized bill and suddenly finding their bill reduced drastically, so if your bill isn’t broken down, ask them to give you an itemized bill.
What credit score do I need to apply for medical financing?
You will be able to find some form of medical financing for any credit score, but if you’re struggling financially, make sure you investigate ways to reduce the bill, low-income programs, and crowdfunding before you start looking to borrow.
That said, most lenders will look for a credit score of 600 or more for good interest rates, and any score below that will likely have a high interest rate.
What is the average medical loan interest rate?
Interest rates on medical loans range from around 4.99% to 35.99%. According to the Federal Reserve, the average 2-year personal loan rate in August 2021 was 9.39%.
How can I qualify for medical financing?
You should be able to qualify for some form of medical financing no matter your credit score, but other aspects lenders will take into account when considering if you’ll qualify for their financing are:
- Income (you’ll need to prove you can afford repayments)
- Recent credit history
- Income-to-debt ratio (below 25% is best, most will accept below 50%, and some will accept below 100%)
- Debt utilization (how much debt you currently carry against how much credit you have access to)
Where to find medical loans
Make sure you investigate what aid you can get through your hospital or other organizations in your area. Once you’ve exhausted your options (including crowdfunding), look to online lenders (like those listed here in our tables), credit unions, banks, and specialist medical lenders.
Compare medical loan rates
It’s critical to shop around to compare rates and options before you decide on the best form of borrowing for you. Try not to panic and take it one step at a time, and don’t be afraid to talk to your medical provider about options. Most people will want to help you get, or pay for, the care you need. When you’re ready, compare the rates of the lenders here in our tables to find the funding you need.
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