Medical Loans Guide

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With the rising cost of health care, many people can’t afford to pay their medical bills on their own. Whether the health care debt you owe has been slowly accumulating over time, or if there’s a sudden and unexpected expense that you can’t afford, there are ways that you can pay your bills.

Medical loans are personal loans that you can use specifically to cover health care costs. You can use these loans to pay your medical bills for services you receive that are not covered by insurance. If you don’t have health insurance, if you’re forced to receive medical care out of network, and/or if your health insurance only covers a portion of your bills, are all circumstances where medical loans can be an ideal solution to avoid falling deep into debt.

Benefits of Medical Loans

The main benefit of getting a medical loan is clear:  you can get money to pay off your medical bills. But medical loans aren’t the only option, and a different course of action might be better suited for your needs.

Before taking out a medical loan, you first need to understand the benefits of it and then weigh those benefits against some of the other options.

So what are the benefits of taking out a medical loan to pay your bills?

- Avoid putting your assets at risk: most of the time, medical loans are unsecured, meaning you do not have to stake any collateral to your ability to pay off the loan on time. With a secured loan, you have to put up a valuable asset, like a house, in order to receive the money. If you don’t pay it off in time, you might end up losing your home. You don’t want to have to risk losing your property over an unpaid medical loan.

- Get money quickly: you can obtain a medical loan relatively easily. Whether you apply for loans through an online vendor or go to a bank, it usually doesn’t take long between signing up for a loan and getting the money. In a medical emergency, you might not have the luxury of time. Perhaps you need medication or a procedure right away to avoid potentially dangerous consequences. If that’s the case for you, getting a medical loan could be a good option to efficiently get the funds you need so you can get the medical treatment you require.

- Secure a reasonable interest rate: A medical loan has the potential to be a cheaper option to finance your medical bills. Especially if you have good credit, you can get a loan with a reasonable interest rate that not only provides you with the money you need in the short-term, but that makes it manageable to pay off the loan in the long-term. There are numerous places that offer medical loans, and chances are good that you can find a competitive one that makes sense for your circumstances.

There is a caveat, however. Not all medical loans offer low interest rates, particularly if your credit score is less than stellar. Do the math and make sure that the interest rate you’re offered makes financial sense for you. But even if you have bad credit, don’t assume that a medical loan is off the table. You often can still manage to find a loan with a reasonable interest rate even with bad credit.

- Use the funds however you want: yes, medical loans are intended to help you pay off your medical bills, but the terms of the loan do not dictate specifically how the funds must be spent. Especially since medical costs can change rapidly and unexpectedly, having money from a medical loan is beneficial because you can use the funds however you need to. If your circumstances change and you accrue an additional and unforeseen expense, you can still use the funds you’ve gotten from a medical loan to pay off that debt. Most lenders offer a wide range of loan amounts, and you might want to consider taking out a bit more than you expect to need. Even if you need to pay for an operation and you know exactly how much it’ll cost, there might be complications or other expenses after the operation that you hadn’t considered before. It would be better to take out a little more with one loan than to have to take out a second.

- Consolidate your debt and pay it off: If you have numerous medical bills from different sources, paying them each off individually could be complicated, and it might even be causing you to fall into more debt if you’re continually late on any of the payments. With a medical debt consolidation loan, you could merge all of your debt into one place. Especially if you have multiple, recurring bills, like for medications, this tactic could be beneficial. So instead of paying off each bill individually, you would only have one loan repayment bill to pay.

Alternatives to Medical Loans

If you have medical bills to pay off, but you don’t have the cash on hand, there are multiple options to consider. Medical loans could be a good option, but it might not be the best one for you and your particular circumstances. There are a few reasons why.

You could get a low interest rate on a medical loan, but you might not. There are some places that offer medical loans that aren’t interested in lending to people with poor credit unless the lender is adequately compensated for the risk of taking on a person with a poor credit history. As a result, some places offer medical loans with interest rates that can climb as high as 20-30%, or even more. If that’s the best offer you can get, then maybe a medical loan isn’t for you.

In addition, medical loans don’t reduce the amount of money you owe. They just put you in a better position to pay off your debt. But there are a few options that might even reduce the total amount of debt that you have or make it easier for you to pay without having to borrow money.

- Request a payment plan: some hospitals or health care providers offer payment plans to their patients. With a payment plan, you can negotiate a more friendly timeline for when you need to pay your bills. You might be granted enough extra time that would allow you to earn the money you need to pay off the debt without taking out a loan.

- Ask for a dsiscount: similarly, you can ask the health care provider if they offer discounts for uninsured patients or individuals who seek their services outside their insurance network. Though there’s no guarantee they’ll offer you one, and some hospitals might have a policy not to offer discounts at all, it never hurts to ask.

- Dispute some of the charges: medical bills, even for simple procedures or services, are long and complicated. You don’t have to accept everything on your bill at face value. Sometimes, hospitals make mistakes, and you might end up charged for something erroneously. You can ask for a claims specialist to clarify some of the costs on your bill or dispute whether you should have been charged for something in the first place. Perhaps you were charged double the amount you should have, and the true cost of your bill is actually within your ability to pay yourself. It’s always a smart move to have someone explain the bill to you to ensure that you’re not paying more than you should be.

- Get a medical credit card: this approach is most similar to getting a medical loan. It’s an alternative way to get the finances you need to pay off your medical bills if you don’t have the cash on hand. You most frequently acquire the credit card through your healthcare provider, and you can only use the credit toward medical expenses.

A medical credit card could be a better option than a medical loan. Sometimes, you can get a medical credit card with deferred interest, meaning if you can pay the credit card bill on time you won’t have to pay any interest. If the credit card does come with an interest rate, it might still be lower than one you could get on a medical loan. With the medical credit card, you might end up paying no more, or just slightly more, than the total cost of the bills sent to you by your healthcare provider.

Whatever course of action you ultimately decide to take, it’s important to do the math. You won’t know for sure whether a medical loan or a medical credit card would work better for you until you explore your options and calculate which one offers you a better deal.

Don’t forget to factor in your ability to pay back the loan or pay off the credit card bill down the road. A medical credit card bill with a deferred interest option sounds great until you realize you won’t have the money in time to pay it off when the bill comes due. If the interest rate that kicks in after the payment period passes is higher than you would get with a medical loan, then the credit card isn’t the right course of action.

A medical loan could be the solution you need to afford the health care treatments your doctor is recommending. Don’t despair if your insurance won’t cover it or if you don’t have the money to pay for it. With a medical loan, you can borrow the money you need to afford the procedure today and pay off your debt later on.

Typical cost is


Based on a $25,000 loan with a 20% interest rate and a 10 year term