Medical loans: How to finance medical costs


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Even if you have health insurance in the United States, it’s very possible to end up with thousands of dollars in medical bills that you just can’t pay back. Medical debt is an unfortunate situation as it often results from a traumatic event like severe injury or illness. Recovering from an event of this nature takes a significant toll on its own, but when medical bills start arriving in the mail, it only makes the situation worse.

One in four Americans have trouble paying their medical bills, and half the country has delayed or declined medical treatment due to finances. But the real catch-22 is that preventive treatments, while potentially cost-prohibitive, can stop more serious problems from developing down the line that result in tens or hundreds of thousands in medical bills. Medical loans are an option to help pay for all types of medical costs, including preventive care and emergency expenses.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

What is a medical loan?

A medical loan is essentially a personal loan that is taken out for the specific purpose of medical financing. With medical loans, you have the flexibility to pay for a variety of assorted medical costs like elective surgeries, IVF treatments and emergency procedures.

Many medical loans are unsecured, so you won’t have to risk your home (or anything else) in the name of your health. However, unsecured personal loans for medical bills are typically best suited for those with good credit scores who can get a good interest rate. If your credit score isn’t great – especially if you’ve struggled to pay medical bills in the past – you can also apply for a secured medical loan. The tradeoff is that you’ll need to offer some form of collateral, which you’ll lose if you find yourself unable to pay the loan. But you’ll get a much lower interest rate and will have less to pay off in the future.

Reasons to get a medical loan

The average cost of a hospital stay is over $15,000. But different medical treatments have vastly different costs, and some are elective while others are not. Here is the typical cost of several common medical procedures, according to USA Today:

  • Appendectomy: $13,910
  • C-section: $15,240
  • Cataract surgery: $3,762
  • Knee replacement: $25,398
  • Hip replacement: $26,489
  • Bypass surgery: $75,345
  • Angioplasty: $29,907

Some medical procedures are urgent life-or-death situations, in which case getting the treatment is the first priority and medical loan financing is arranged after the fact. But other treatments fall into the elective category, meaning they’re not medically necessary but have the potential to considerably improve your health, comfort or quality of life. This is still a valid reason to seek a medical loan, especially since saving up to pay for a procedure in cash takes time, during which you’re unable to experience the benefits of the treatment.

Medical loans can also be used to pay for things like a service dog, necessary rehabilitation equipment, etc.

Pros and cons of medical loans

Pros of medical loans

  • Flexible loan terms including amount and repayment period
  • Expedites medical treatment
  • Can be used to cover other related costs, like living and travel expenses during treatment and recovery

Cons of medical loans

  • Interest rates can be high
  • May not cover entire cost

Alternative medical financing options

Credit cards

Credit cards are a viable option for medical loan financing on less expensive procedures, especially if you’re taking advantage of an introductory zero interest offer. But did you know there are credit cards intended explicitly for medical financing? Medical credit cards are offered by several lenders and are an immediate solution to paying for medical costs.

However, an analysis of medical credit cards found that interest rates can be higher than other credit cards; some lenders even take advantage of unwary patients by advertising heavily in doctors’ offices and not being upfront about the terms. For example, medical credit cards with an introductory 0% APR offer for the first year might charge interest retroactively if the full balance isn’t paid off before the 12 months are up. If you’re considering a medical credit card as an alternative medical loan, just make sure you read and fully understand the terms.

Payment plans

Many medical offices offer payment plans for their services, some even without interest. Before filling out any applications for a loan or credit card, talk to your doctor about your concerns regarding paying for the procedure. You might be surprised to find out that working out a payment plan directly with your provider might be the most affordable medical loan financing option.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

The bottom line

Medical bills are among the highest expenses Americans will pay in their lives. While the cost of elective and preventive procedures might seem prohibitive, remember that taking good care of your health now can help prevent a serious illness later that results in tens or hundreds of thousands in medical bills. Although many American decide to put off medical treatment due to cost, medical loans exist for a reason, and they’re here to help you afford the care you need.

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