Even if you have health insurance in the United States, it is possible to end up with thousands of dollars in medical bills that you will not be able to pay off. One in four Americans struggles to pay their medical bills, and half the country has delayed or refused medical treatment because of its finances. However, both preventive care and emergency treatment are important; for people unable to cover these expenses up front, medical loans can help cover the costs.

Be pre-qualified

Answer a few questions to find out which personal loans you are prequalified for. The process is quick and easy and will not affect your credit score.

What is a medical loan?

Essentially, a medical loan is a Personal loan which is taken out for the specific purpose of financing medical treatment. Medical loans can cover a variety of medical expenses, such as elective surgeries, IVF treatments and emergency procedures.

Many medical loans are Insecure, which means 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 generally more suitable for people with good credit scores who can get a good interest rate.

If your credit score isn’t good – especially if you’ve had trouble paying medical bills in the past – you can also apply for a secured medical loan. The trade-off is that you will have to offer some form of collateral, which you will lose if you find yourself unable to repay the loan. But you will get a much lower interest rate and pay less in the future.

How do they work?

You can get a medical loan by applying online or at a traditional financial institution. Many lenders will allow you to get prequalified, a process that gives you your available rates and terms based on your basic financial information. In order to formally apply for the loan, a credit check, salary check, and other information will be required.

The time to receive funds after approval will vary from lender to lender, but can take up to a week in some cases. Once the funds are received, you will make fixed monthly payments until the loan is paid off in full, with interest added to each payment.

How are they different from personal loans?

A medical loan is a type of personal loan, the proceeds of which can be used to pay for medical bills. In fact, many lenders may not even distinguish the loan as a medical loan, but will instead indicate in their loan terms or documentation that medical charges are an acceptable use of the loan proceeds, says Katie Bossler of GreenPath Financial Wellness.

Benefits of medical loans

Medical loans can be a good alternative to running out of emergency savings or accumulating credit card debt. Here are some of the main benefits of a medical loan:

  • Variety of loan conditions: Most personal loans offer repayment term options ranging from 36 to 60 months, allowing you to select the term that best suits your needs. And since the interest rates are fixed, you’ll get the exact same payment every month.
  • Quick financing. “It’s quite common for patients to be denied services unless they pay. A medical loan may be the only way to get critical medical care, or cosmetic care for that matter, ”says Michael Sullivan of Take Charge America. Many personal loans can be disbursed within days, giving you the cash you need right away.
  • Cheaper than credit cards. Using a credit card to cover the cost of medical treatment can be expensive, with interest rates around 16 percent on average. If you have good credit, it is common to find personal loans with interest rates of around 6% or less.
  • Flexible use. The proceeds of personal loans can be used for almost anything you want. “In the case of medical expenses, uses could include treatments or procedures not covered by insurance, as well as living and travel expenses incurred during treatment and recovery,” says Michael Micheletti of Freedom Financial Network.

Disadvantages of medical loans

Medical loans are not the right choice for everyone. Here are some of the main considerations:

  • High interest rates for borrowers on credit. Although personal loans generally have lower interest rates than credit cards, keep in mind that bad credit could make your medical loan more expensive. Borrowers with bad credit will often see interest rates capped at 35% on personal loans.
  • Limited funding. It’s no secret that medical treatments can be extremely expensive and in some cases medical loans may not be enough. The amount of your loan depends largely on your financial profile, but many lenders have limits of around $ 40,000.

Who are medical loans for?

Medical loans can be a good idea for those with a strong credit history who can benefit from the most favorable interest rates and terms. A loan can also be a good option for someone who wishes to use the funds for a variety of expenses, including travel expenses or other expenses incurred in association with treatment and recovery.

Also, those who need treatment immediately and don’t have adequate insurance or enough money to pay for medical bills on their own may consider a loan. “When you are faced with a life-threatening illness, it is certainly better to take out the loan rather than make another appointment for another time,” says Sullivan.

How to apply for a medical loan

If you’ve determined that a medical loan is right for you, follow these steps:

  1. Decide how much you want to borrow. The first step in any loan application process is determining how much money you need and can realistically afford to borrow and repay. Calculate the numbers and identify the most manageable loan amount for your monthly household budget.
  2. Check your credit. Since loan terms and interest rates have a lot to do with your credit history and credit rating, it’s a good idea to review your credit profile and correct any mistakes you find. This information will help you understand what types of lenders to look for – some lenders specialize in loans for people with poor credit, for example.
  3. Look for several lenders and loan options. Loans to cover medical expenses are available from online lenders, banks, and some credit unions. Health care providers can also offer medical loans. Get quotes from a few lenders and identify the most competitive rates and the best loan terms.
  4. Select a lender and complete the application as needed. In addition to your personal information, most lenders will need proof of income and employment. Once you have completed the entire application process, you may be able to receive funds in just one business day.

Alternatives to medical loans

For some, medical loans are not the right choice, whether due to time constraints or credit requirements. Fortunately, there are alternatives.

Credit card

Credit cards are a viable option for financing less expensive procedures, especially if you are taking advantage of a introductory offer without interest. Several lenders even offer medical credit cards, which are an immediate solution to paying for medical bills.

However, the interest rates on medical credit cards may be superior to those of other credit cards; some lenders even take advantage of unwary patients by doing a lot of advertising in doctors’ offices and not being upfront about terms. For example, medical credit cards with a 0% APR introductory offer for the first year may charge interest retroactively if the full balance is not paid by the end of 12 months. If you are considering a medical credit card as an alternative medical loan, carefully review the terms and conditions first.

Payment plans

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

Be pre-qualified

Answer a few questions to find out which personal loans you are prequalified for. The process is quick and easy and will not affect your credit score.

Final considerations

Medical bills are among the highest expenses that Americans will pay in their lifetime. While the cost of elective and preventive procedures may seem prohibitive, remember that taking good care of your health now can help prevent serious illness down the road that will result in tens or hundreds of thousands of dollars in medical bills.

While many Americans decide to postpone medical treatment because of the cost, medical loans exist for a reason, and they’re there to help pay for the care you need.

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