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Should You Take Out A Medical Loan?

Healthcare costs in the US keep going up. Some treatments can cost thousands of dollars - which is money that most people don’t have set aside. The best way to pay for medical expenses is to take out a good health insurance policy, however even with insurance there are still going to be forms of treatment that aren’t covered, as well as extra costs like deductibles to factor in.

Taking out a loan might seem like the best option for affording treatment in many cases. However, loans do some with their drawbacks, which is why it’s important to weigh up your options. This post explores medical loans in greater detail, as well as listing a few alternative methods of funding that could be worth considering.

What Are Medical Loans?

A medical loan is basically a personal loan that is used to fund medical treatment. It is typically not to be used on non-medical expenses and may require you to provide information to prove your purpose for borrowing. You’ll find many different lenders online offering medical loans, each with different rates and approval requirements.

Medical loans often have advantages over everyday personal loans. The application and approval process is often much quicker, allowing you to have the money in your bank faster if it happens to be an emergency. Lenders may also allow you to borrow more than you typically would with a regular personal loan, plus you may find that interest rates are lower on these types of loans.

Of course, this isn’t always the case. Some lenders offer ‘medical loans’ that are practically identical to their general personal loans - these types of loans are best avoided as they have no benefits. There are sites you can use online to compare medical loans.

Can You Get Medical Loans With A Low Credit Score?

Many lenders will not approve you if you have a low credit score. That said, there are some lenders out there that do lend to customers with low credit scores, sometimes not even requiring a credit check.

The disadvantage of these low credit medical loans is that they often have very high interest rates, which may be variable. If you are already not in a good place financially, it’s probably a good idea to avoid these loans as they could cost you a huge amount of money in the long run and they will be hard to budget for. There are some low credit lenders out there that do offer good deals, but these are tricky to find.

What Are The Alternatives To A Medical Loan?

A lot of people think that a loan is their only option when funding medical treatment. However, there are almost always other options available if you’re willing to take the time to look. These options could be a lot less expensive overall. Below are just some of the best alternatives to a medical loan.

Set Up A Payment Plan With Your Doctor

Many doctors and hospitals allow you to pay for treatment in instalments rather than having to pay it all in one go. This is often one of the best ways to pay for treatment - unlike a loan, these payment plans typically come with low interest and sometimes even no interest.

You may not be offered a payment plan when you get your medical bill. In many cases, it’s something that you have to request yourself - if you don’t ask, you don’t get. Contact the clinic’s billing department when you get your bill and ask about payment plans, and you’ll usually find that they can set something up.

When it comes to treatment that is scheduled in advance, you’re often better off setting up a payment plan as you book your treatment - if you wait until you’ve had your treatment, you may find that you’re less likely to be offered a payment plan. When it comes to emergency treatment, payment plans may be more accessible after you have had treatment.

Look Into Medical Credit Cards

There are credit cards that you can take out specifically for medical expenses. CareCredit, Medkey and Wells Fargo Health Advantage are just a few examples of medical credit card providers.

Unlike a regular credit card, these cards have much lower APR. In fact, the likes of CareCredit and Medkey offer an interest free period, allowing you to pay back your credit card bills without any extra charges.

When applying for one of these cards, it’s important to check what is covered - most cards cover the majority of medical expenses, but some may only cover limited procedures. Just like taking out a loan, you need to be able to meet approval requirements.

Launch A Crowdfunding Campaign

When it comes to scheduled treatment, you may be able to raise funds by starting a crowdfunding campaign. There are many people who are willing to put money towards expensive treatment - especially if it’s to help treat a disease such as cancer or fund recovery surgery for an injury that wasn’t your fault.

Sites like GoFundMe, StartSomeGood and Fundly are popular options. In order to raise funds effectively, you’ll need to promote your crowdfunding campaign by asking friends and family to share it across social media.

If you need to seek treatment for an injury that was not your fault, you should consider whether you are eligible for legal compensation. For example, if you were involved in a car accident that was the fault of another driver and you sustained injuries, you may find that you're able to claim compensation with the help of a car accident lawyer.

Legal compensation could help to pay for treatment and any recovery time. Unfortunately, there is no certainty in a lawsuit and you’ll have to wait a while to get the money you’re owed - it’s therefore not an option if you need to pay for treatment immediately.

Hire A Medical Advocate

A medical advocate is a professional who works on your behalf to help negotiate reduced treatment costs. If you’re on a low income, you may find that you’re eligible to use an advocate. This can often be a great way of finding affordable care.

Advocates typically charge a percentage of the savings that they’re able to get you. Others charge on an hourly basis for their services. Make sure to look into pricing before you choose to hire an advocate.

Look Into State Grants And Charity Support

There are many other funding options available to those on a low income. Some states and cities offer grants to those on a low income for certain types of medical treatment - you can search for available grants at sites such as this one. Similarly, there are many local and national charities who may be able to offer funding for treatment if you can prove you’re on a low income.

Should I Take Out A Medical Loan?

There are clearly many alternative options to a medical loan. It is worth assessing all of these first before you decide to go down the route of taking out a loan - you will save money in the long run by considering other options.

If none of these alternative options are available and you do decide to take out a loan, make sure to shop around carefully for lending options. Make sure that you can afford monthly repayments and check the interest rates. If the loan is advertised as a ‘medical loan’, make sure that it has clear perks beyond a standard personal loan.

About The Authors

Stefano Mclaughlin

Stefano Mclaughlin - For the first five years of his career, Stefano worked as a financial advisor on state and local tax matters, developing internal marketing technology for his multinational tax business. With over 12 years of experience designing high-performance web applications and interactive interactions, Stefano is now a marketing technology specialist and founder.

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