What is a Medical Loan?
A medical loan is a type of unsecured personal loan that applicants may acquire for aiding in medical expenses incurred by the applicant or a loved one. The potential borrower can also use the funds for a family pet that requires medical care. Applicants are required to meet the eligibility requirements for the medical loan. The medical loan can often be at a lower interest rate than other types of personal loans or installment loans.
Having the financial means to reduce or quell mounting medical expenses may come from out-of-pocket. Depending on the severity of the medical emergency, a savings fund may not cover the added financial burden. Applicants may also reach out to family or friends for a personal loan to cover the incurring medical bills. Although, some people might not have access to a private lender, or a savings account that can handle medical bills.
With the flexibility of a smaller payment and the staggered repayment schedule, potential borrowers may find that the medical loan could provide them with the funding they need. Helping reduce the financial burden a medical emergency can have on an individual. Exploring all available avenues for money can help reduce the stress of funding a medical emergency.
What to Consider When Choosing a Medical Loan?
What is the interest rate?
An interest rate is determined by the potential borrower meeting the eligibility requirements. Current interest rates offered are between 15-18% for an applicant’s consideration. The exact medical loan specifics will differ based on the applicant’s criteria.
What are my other options?
A potential borrower experiencing the financial hardships of compounding medical expenses can find debt relief through other means as well. A credit card may help ease some financial burdens, but most credit cards operate at a high-interest rate and could end up costing the individual even more financial distress.
Who is the money paid out to?
As the individual navigates the lender’s application process, the lender validates the required criteria and develops a medical loan offer for the individual to consider. The applicant can agree to the terms of the lender and accept the financial agreement and funding. Once the agreement has been finalized, the borrower will have access to the funds through their preferred banking method.
What are the monthly payments?
Once an agreement is devised the potential borrower reviews the lender’s terms. They can agree or disagree with the contract. If the individual decides to pursue the medical loan. The borrower will receive a preset payment arrangement that will coincide with their paydays or income deposit days. As a medical emergency can have a vast array of complications and funding needs, there is no set amount of payment amounts or terms established for a medical loan.
How much will I pay in total interest?
The interest rate that the lender will present to the potential borrower will mainly depend on the eligibility of the applicant. Lenders factor in an applicant’s current debt ratio, payment history, credit score rating, and possibly employment history. Once the entire schematic is processed, the lender presents that applicant with an interest rate offer for their consideration.
Pros and Cons of Medical Loans
Pros of Medical Loans
Acquiring a medical loan could help an individual facing the burden of funding medical care for themselves or a loved one. The funding could help with ambulance bills, prescription bills, medical treatment funding, or even for a medical procedure for a family pet. Medical loans can be used for any variety of medical costs, or expenses that an individual may require.
Cons of Medical Loans
Although a medical loan might be a solution for one applicant, it might not be for everyone. Applicants financially accept a contractual obligation when they receive the funds. Once in the arrangement, there is no room for error. Defaulted payments impact the individual’s credit rating, as well as their trust rating with lenders.
Medical Loan Alternatives
Hiring A Medical Billing Advocate
Acquiring the services of a medical billing advocate can usually help identify problem areas in an individual’s medical billing records. The medical billing advocate looks into all the charges and accrued interest of the medical bills and helps work with administration with the hospital to sort any errors. The advocate may also help work with an individual’s insurance company, helping rectify any outstanding amounts. Investigating any billing charges that perhaps should have been covered by the individual’s insurance plan. Having the medical billing advocate in your corner could end up saving the individual funds that they were not aware were covered or overcharged. Medical billing advocacy is not widely available as the program is being newly developed and implemented.
Set Up a Payment Plan with the Doctor or the Hospital
Some hospitals are in the position to offer financial relief directly to patients. Some offer low-interest repayment plans that could potentially be medical loans alternatives for a potential borrower to consider. This financial arrangement is considered by the doctor or hospital when applicants complete an application for the payment arrangements for the outstanding medical bills. Some criteria must also be met before the hospital agrees to carry the debt with scheduled payments being made. Not all applicants qualify for their strict requirements, or the hospital simply does not offer billing relief and requires the debt to be paid in full.
Get A Medicinal Credit Card
Applying for a medical credit card could potentially help an individual cope with added medical costs. The individual can be considered for a medical credit card if they meet the requirements. A regular gauntlet of verification is required. Lenders review your payment history, income source, and debt ratio, the applicant’s credit score is largely the deciding factor. Applicants with a less than great credit score; 650 plus, will most likely not be considered for a medical credit card. Providing that the individual meets the requirements, a medical credit card might be a great medical loan alternative.
How to Get a Medical Loan
Step 1: Decide the Amount You Want to Borrow
Determining the amount an individual wants to borrow for a medical loan will involve carefully calculating their current medical bills and the costs of any further treatments that may be required. Knowing exactly what you need to borrow will help an individual budget the payments that will be required to contractually receive the medical funding. Once a value is established, a potential borrower can begin exploring medical loan offers.
Step 2: Check Your Credit
Every individual should know their credit score, not only for borrowing reasons, it can help identify financial matters that perhaps an individual may not have been aware of. Most individuals can access their credit rating directly through the credit bureaus. With some available online for monitoring and to help individuals sort any discrepancies. Knowing your credit score could help you identify possible lending solutions that may be available to you.
Step 3: Compare Medical Loan Offers
Knowing the specifics of your financial capacity, and exploring the variety of medical loan offers that might be available for consideration and that could alleviate the complications of medical costs. By having a strategic methodology for easing the financial hardships of the incurred medical bills, an applicant can explore the best medical loans that may be available to them. Comparing the variety of lenders, and utilizing pre-qualifying criteria to create detailed medical loan options. Often prequalification can offer the applicant an overview of payments and scheduling before they commit to the arrangement.
Step 4: Select A Lender and Complete the Application
Once the potential borrower has reviewed all the medical loan offers, they can proceed to accept the offer that works with their ability to repay the medical loan. When the applicant agrees to the terms the lender has presented, the applicant can then advise the lender to process the application for final review and signing. Once the application is reviewed and signed the agreement then becomes a contractual obligation that must be met by the borrower.
Why Would You Need Medical Loan?
Understanding the variety of financial solutions that may be available to an individual who has accumulated medical expenses can potentially help ease the burden. Many medical procedures have upfront costs for an individual to help financially prepare for.
Not all medical emergencies can be financially planned for. For example, on average a patient with a broken leg could potentially cost $8000 in procedure and aftercare costs.
Whereas, a patient having an angioplasty may want to consider a medical loan to help cover the average cost of $28000.
Knowing an impending emergency procedure could potentially allow an individual to pre-plan financially for the costs. Having to have an emergency spleen removal could cost an average of $47000. Medical loans can be a proactive measure before the emergency procedure or a solution for after the costs have been tallied.
Long-term medical concerns, which may require outpatient care, like home dialysis treatment. Could cost an average of $52000 for a patient. A patient could be compiling hospital interest charges on the medical bill. Exploring medical loan offers may help an individual alleviate the burden of incurred medical costs.
For individuals that may be facing hip replacement surgery, the average cost that a patient could potentially incur is about $39000, according to 2020 analysis records.
Some cosmetic surgery procedures like skin grafting could potentially cost an average of $51000. Having funding sorted before the procedure, if possible, could help the patient absorb the financial costs more efficiently into their monthly debt ratio.
Some procedures could have costs growing and recalculated as the process and treatments continue. Patients who require spinal fusions may potentially incur an average cost from $80000 to upwards of $150000. Exploring potential medical cost funding could relieve some of the burden and hardships the large bill could have on an individual’s treatment plan.
For patients that may require one-year peritoneal dialysis care could end up facing an average $53000 medical bill. Applying for a medical loan to cover the medical expenses could help with the added costs.
Applying for a $70000 medical loan for a knee replacement surgery may cover the expense of the average medical cost of the procedure.
Knowing, and exploring, all available funding options available to an individual, could not only better their medical care, but can also help relieve the added burden of medical costs after the procedure.