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Christine Tait

Last updated: 8/2019

Find the Best Personal Loan for Your Needs

If you’re not careful, the price of a medical procedure can put you in a deep financial pit. Even if you have insurance, that doesn’t mean all your costs are covered. Therefore, it’s a good idea to explore your options for medical financing before it’s too late. 

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The Price of Medical Procedures

Medical Loan

Most people dramatically underestimate just how much a medical procedure can cost you. Even simple procedures often cost thousands of dollars, with more complicated procedures running into the tens of thousands. For long-term problems that might require multiple visits and surgeries (such as cancer treatment), you could easily be looking at hundreds of thousands in overall costs, not to mention the loss in wages that might ensue as well.

For example, heart bypass surgery usually costs anywhere from $70,000 to $200,000, correcting vision costs between $1,000 and $3,000 per eye, and chemotherapy runs $11,000 to $12,000 per month.

A failure to pay can lead to substantial medical debt and a big problem for your credit score. To prevent that, there are a number of different medical financial options to consider.

Unsecured Personal Medical Loans

An unsecured loan or signature loan effectively allows you to borrow money without putting up any collateral. If you don’t have any assets that would be valid as collateral, then an unsecured loan is likely going to be your best bet.

Unsecured personal medical loans are fairly easy to apply for, especially since many lenders allow you to apply online. If getting a loan from an unfamiliar company doesn’t appeal to you, then your bank or credit union could also either accommodate your needs or direct you to a reliable organization. Loans from online lenders in particular tend to have competitive rates since they know borrowers will be weighing their options in a couple short clicks.

In many cases, unsecured loans have static interest rates, making it easier to both compare different lenders and plan out your repayment plan for the future. Expect to be paying the loan for a couple of years.

However, if your credit is poor, you might not qualify for the best terms. You might not be able to get as much money as you need or the interest rates might be much higher than normal.

Ultimately, the benefits of unsecured medical loans are that they have competitive rates, no need for collateral, an easy application process, a simple repayment scheme, and standardized interest rates.

On the other hand, unsecured medical loans might be completely unattainable if your credit is bad enough. Even if your credit score is above the bare minimum, you likely won’t get the best terms possible. Unsecured loans can also cost more than other options, especially when it comes to credit cards with special introductory offers.

Secured Loans

To contrast, you could also get a secured loan, such as a second mortgage or a home equity line of credit. Both of these options do depend on you owning your home (and in the case of HELOC, possessing significant equity). If you only rent or have a different housing situation, then secured loans might not be viable. Unlike with other situations that call for secured loans, you generally can’t use your car or other assets as collateral for a medical loan.

Medical Loan

In terms of amount, you can usually get up to 85% of the value of your home, meaning that you can cover even extremely expensive procedures if the loan is secured by your home. The interest is generally low and tax deductible, making it one of the better options if you have access and need to get tens or hundreds of thousands of dollars.

Of course, there is the big downside to be concerned with: what happens if you fail to make your payments. Unlike with other options, a secured loan puts your house on the line. If something goes wrong and you miss a payment, you could lose your entire house.

401(k) Loans

In many cases, you can use your retirement savings to pay for significant medical procedures. At the simple end of the spectrum, you can take money out of your account early and pay the substantial fees associated with early withdrawal. However, there is a mechanism in place specifically for situations like these: you can actually borrow money from the account and pay it back over up to five years.

There are a number of benefits that come with this. Firstly, you don’t have to deal with any sort of credit checks, so if your credit score isn’t very good, then this is one of the better options out there. With other options, the benefits primarily come from special deals offered to individuals with good credit, but with a 401(k) loan, it depends almost entirely on how much you’ve saved up.

Secondly, the repayment period is substantially longer than some of the other options listed here (particularly credit cards). Five years is a long time and often enough for you to pay off the cost of the procedures. For larger procedures and procedures that require multiple visits in particular, the extended duration of a 401(k) loan can give you the breathing room you need.

However, there is a big drawback that is unique to 401(k) loans as well. If you stop working at your job for any reason, then you’ll be put into a difficult position where you either need to immediately pay off the rest of the loan within 60 days or suffer the early withdrawal penalties that come with taking money straight from your retirement account.

Marketplace Lenders

Modern technology can make it easier to pay for medical procedures, especially when it comes to the interconnectivity provided by the internet. At online marketplaces, you can be matched with lenders that will loan to you specifically. These loans range from the low thousands to the middle tens of thousands, so they’re best suited to the less expensive procedures.

The main benefit of using such an online marketplace is that you will get extremely competitive rates. It’s easy to see exactly what everyone is offering, so it’s easy to see when you’re getting a bad deal. However, this does work both ways, so lenders that offer the best rates also have the opportunity to discriminate more based on your credit score. The better your score is, the easier you will find it to link up with lenders. In many cases, these loans come with lower fees than you might find elsewhere, as well as a very simple approval process.

On the other hand, your credit may need to be very good to compete. Even if you do get offers with poor credit, they might come exclusively with less competitive rates attached since the lenders assume that you won’t have better offers elsewhere.

Standard Credit Cards

A credit card is one of the simplest and easiest ways to finance a medical procedure .If you’ve got enough room before you hit your limit, then there usually aren’t any complications beyond that. A minority of medical providers might refuse to accept payment via credit card, so make sure to check before committing to a plan. Fortunately, there are some specific benefits to credit cards that you might be able to leverage.

Medical Loan

For example, if you either have a credit card with a great introductory offer or are thinking of applying for one in the near future, then that could be an ideal solution to your financing problem. It can be difficult to fully take full advantage of 0% APR offers, offers that give you a percentage of spent money back as cash, or offers that reward you with a lump sum for spending a certain amount within a certain number of months When financing a medical procedure, the large amount of money involved generally means that you can take maximum advantage of those benefits.

One of the biggest advantages to credit cards is that, in ideal conditions, they can allow you to pay off your procedure with no interest. If you do have a 0% APR offer, then if you manage to pay off the entirety of the credit card (or at least the medical procedure’s portion) before the introductory rate expires, then you will have effectively paid nothing extra in exchange for delaying the payment of the procedure by several months.

However, it’s important to keep in mind that if you don’t have a credit card right now, you might not qualify for any decent offers if your credit rating is low. If you do decide to cover your procedure with a credit card and fail to pay it off completely before the introductory rate expires, then you might end up with higher overall interest payments than you might have had with a loan.

Medical Credit Cards

In the specific case of paying for a procedure via credit card, you may have the option of getting a medical credit card. These specialized credit cards tend to have similar low APR offers for the few months or years, but they come with a major drawback as well.

With a regular credit card, if you pay down part of the treatment and only have a fraction of the original cost remaining when the introductory offer expires, then you only need to deal with the increased interest rate on that remaining portion. For what you did pay off, you effectively paid it off with 0% interest.

With a medical credit card, you get hit with interest for the whole procedure if you haven’t paid off the whole amount by the time the introductory period ends. Even if you pay off 90% by the time that date rolls around, you will still need to pay interest for the whole 100% rather than the 10% with regular credit cards.

Ultimately, medical credit cards aren’t ideal if you can take advantage of a traditional credit card offer, but they can be a viable alternative if you simply don’t have access to a regular credit card with low APR. If your credit score is too low for a good offer with a regular credit card, you may still be able to get a medical credit card.

Conclusion

A tragic accident can leave you with reduced quality of life and a mountain of debt on top, but there are ways to make that burden lighter. If you pick the right medical financing option for your circumstances, then you may be able to weather the storm and come out with minimal damage.

FAQ

General Medical Loan Questions

This section answers general questions about medical loans. Use this information to gain a solid understanding of how medical loans work.

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How to get a medical loan for surgery?

There are several options for medical loans for surgery. You can seek a loan from a bank, a friend or family member, or from specialized medical loan companies.

Can you take out a loan for medical expenses?

In many cases, yes. There are specialized financial companies that deal exclusively with credit and loan packages for medical bills.

Can you get a loan for medical bills?

Many times, you are able to get a loan for medical bills. Most medical offices will have information on financing plans that either they provide or are provided through a third-party funder.

Can I get a loan for medical bills?

It is possible to get a loan to pay for medical bills. You’ll need to qualify for the loan and demonstrate that you have the ability to pay the loan back to get approval.

Can I get a medical financing loan for surgery?

In lots of instances it’s possible to get medical financing for a surgery. We recommend checking out specialized medical loan companies. They’ll work with your doctor and get you the best rates.

Can you be denied a medical loan?

Yes. It is possible to be denied for a medical loan. You’ll need to talk to the lender to get more information about why you were denied.

Can you get a bank loan for medical bills?

Sometimes banks will give loans for medical bills, but most medical loans come from specialized medical loan companies like Care or Parasail. DCU loans can be a good alternative.

How hard is it to get a medical loan?

The difficulty you have getting a medical loan depends on how qualified you are. If you have a good credit score and a history of paying your bills on time, then it won’t be too hard to get a medical loan.

How to get a $40,000 medical loan with fair credit?

It might be a challenge to get $40,000 for a medical loan with fair credit. Your best option is to try peer-to-peer lending networks like Lending Club or specialized medical lenders like Care.

How to get a small medical loan?

One of the best solutions when you need a small medical loan is to apply for medical-specific credit cards. These are usually easier to get and will have a high enough limit for your procedure.

Can I get a medical financing loan for surgery?

You can usually get medical financing for surgery. However, it depends on lots of factors. Check with specialized medical financing companies or peer-to-peer lending networks for the best options.

Medical Loans and Credit Scores

We’ll answer the most common questions about medical loans and credit scores in this section.

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What credit score do you need for a medical loan?

There are medical loans available for people with all kinds of credit scores. However, a lower credit score can result in an incredibly high interest rate. One company requires a credit score of 500 but will charge up to 155% on the loan.

How to get a medical loan with bad credit?

It can be challenging to get a medical loan with bad credit. Specialized lenders are your best bet. You can also check with your doctor’s office to see if they have in-house financing options.

Does medical loan get reported to credit companies?

It depends on what company you have your medical loan with. You’ll need to talk to different lenders to see what their reporting policies are.

How to get a medical loan with no credit?

The best way to get a medical loan with no credit is to get a secured loan. You can put something up as collateral to lower the risk for the lender, increasing the odds you get approved.

Can I get medical financing with bad credit?

It’s possible to get medical financing with bad credit, but you might have to pay a much higher interest rate. Check with specialized medical lending companies for your best odds at approval.

Sources of Medical Loans

This section covers the most popular questions people have about different sources of medical loans.

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Does Safeway Credit Union do medical loans?

Safeway Credit Union doesn’t explicitly say they do or do not offer medical loans. Their secured or unsecured loans may be able to help you.

Does Sallie Mae have an aggregate limit medical loan?

No, Sallie Mae is only offering student loans at this time.

How many people use payday loans for medical expense?

While there’s no information on how many people use payday loans for medical expenses, 70% of payday borrowers report using their loans for ordinary expenses. The expansion of Medicaid caused an 11% dip in payday borrowing in certain areas.

Where can I get a medical relief loan?

Some of the best places to get medical relief loans are through your insurance company, peer-to-peer networks, or financial companies that specialize in medical loans.

Do they still have Jayhawk plastic surgery loans?

There’s no information to indicate that Jayhawk plastic surgery loans are still around.

Medical Loans, Interest Rates, and Costs

We’ll cover the most common questions about medical loan interest rates and costs in this section.

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How much for medical loan per year?

The amount you pay per year on your medical loan depends on the amount you borrow and the interest rate you’re given based on your qualifications.

How much of a medical loan can I afford?

The amount of medical loan you can afford is set by lots of different factors. We recommend using a medical loan calculator to see how much you could potentially borrow.

What is the interest rate for medical loans?

The interest rate for medical loans has a very wide range – from 5% all the way to 155%. You’ll need more information about your situation and specific needs to get an accurate interest rate prediction.

What is a good current interest rate for medical loan?

A good interest rate for a medical loan in the modern market is anywhere between 8% and 18%, depending on your particular qualifications.

How much can I get for a loan for surgery?

The best way to see how much money you can get for a surgery loan is to use an online calculator, as the amount your eligible for depends on lots of factors.

Medical Loans for Specific Operations

This section answers questions about medical loans for specific operations.

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How to get a loan for cosmetic surgery?

Peer-to-peer lending networks and specialized medical surgery lending companies are the best places to look for a medical loan for cosmetic surgery.

Can I get a loan for plastic surgery?

It’s possible to get a loan for plastic surgery. The key thing will be demonstrating that you will have the ability to pay the loan back once your surgery is complete.

How to get a plastic surgery loan with bad credit?

It may be difficult to get a plastic surgery loan with bad credit. Your best option is to see if your surgeon has any in-house financing or pay-by-installment options you can use.

Can i get a bank loan for cosmetic surgery?

It’s possible to get a bank loan for cosmetic surgery, but unlikely. Your best bet is to try peer-to-peer lending networks like Lending Club or specialized medical lenders for financing.

Can I get a loan for facial feminization surgery?

Yes, you can get a loan for facial feminization surgery. Some of your best options are loans from a credit union, a home-equity line of credit, or specialized medical loans and credit cards like CareCredit.

How do cosmetic surgery loans work?

It depends on the terms of your loan agreement. Most loans will have a day that you’ll need to start paying the loan back. Your payment amount will be set up based on how much you borrowed, your interest rate, and the term of the loan.

How long are plastic surgery loans?

Many lenders offer flexible payment terms that can range from six to 60 months, depending on your particular situation.

How to apply for a loan for cosmetic surgery?

The best way to apply for a loan for cosmetic surgery is to find a few lenders that provide these loans. Prepare your income statements and be ready to explain how you’ll be able to pay the loan back.

How to get loans for gastric sleeve surgery?

There are specialized medical lenders like CareCredit that offer medical loans for elective surgeries. You can also check out personal loans from a credit union or peer-to-peer lending networks.

How to get unsecured plastic surgery loan with bad credit?

It will be difficult to get an unsecured plastic surgery loan with bad credit. Peer-to-Peer lending networks are your best option, as they will look at more than your credit score and give you the chance to explain how you’ll be able to repay your loan.

Can I take out a loan for Lasik eye surgery?

You can take out a loan for Lasik eye surgery. CareCredit, peer-to-peer lending networks, credit unions, and interest-free credit cards are your best options.

What kind of loan should I get for plastic surgery?

That depends on your financial situation and how much your loan will cost. For many people, peer-to-peer lending networks like LendingClub or specialized medical lenders will give you the best chance at securing a loan.

Other Medical Loan Questions

We’ll cover medical loan questions that don’t fit into our other section here. If you can’t find your question elsewhere, then this is a good place to check.

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Can I write off medical loan payments?

It depends on several factors. You should consult a certified tax preparer or accountant to see what you can and can’t write off on taxes.

How do I get a loan to cover medical expenses?

You can get a loan to cover medical expenses by applying for one. There are lots of companies that specialize in medical loans. You can also try credit unions and peer-to-peer lending networks.

Can I get a loan to pay for medical insurance?

Not in most cases – most lenders will be hesitant to lend you may to pay for health insurance out of the fear that you won’t be able to repay the loan.

Is it hard to get a medical loan?

That depends on your situation. It’s harder to get a medical loan the lower your credit score is and the worse your employment history and debt to income ratio is.

Can you get loans for surgery while on disability?

These kinds of cases are specialized. You should talk to a disability advocate or a lawyer to get the best information on your situation.

Can I use finance in a medical setting?

Yes, you can use finance in a medical setting to help people pay their medical bills and get the treatments they need when they can’t afford to pay for them in full.

How is medical care financed in the United States?

There are lots of different medical care financing mechanisms in the US. Most medical care is paid for by private insurance companies or public health assistance. People also take out medical loans and use other means to get funds for healthcare.

How many people go bankrupt due to medical finances?

In a recent report, two thirds of people that declared bankruptcy cited medical bills as one of the primary reasons.

How to get medical financing with bad credit?

You can get medical financing with bad credit by looking for specialized high-risk medical lenders. However, you should be prepared to pay an extremely high interest rate.

What is major source of medical care financing for Americans?

The biggest source of medical care financing for Americans is health insurance and government health assistance.

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Christine has a solid background in personal finance as she spent the last eight years working at one of the biggest banks in the US. She managed her own team of financial advisors that helped hundreds of people with their financing needs. Her innate understanding of different financial products and loans helped her move up the ranks quickly after graduating with a degree in Business Administration.