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Emergencies happen, and when they do, you could be left with a massive medical bill that you cannot afford. Other procedures, known as electives, are optional medical treatments that aren’t covered by insurance. These surgeries, including some infertility treatments, plastic surgery, and dental care, can be quite pricey.
The solution to both unforeseen medical emergencies and electives not covered by your insurance may be a convenient medical loan. What is a medical loan, how do you apply and get approved for one, and what types of terms can you expect? Find out now.
Personal loans are loans that can be used for any purpose without strings attached, making them the ideal choice for financing a surgery or paying for other medical bills. When you take out a personal loan, you’ll be charged an interest rate that’s based on the current rates along with your credit history. You will pay off some of the loan each month, and this can be paid off over the course of several years, making the entire financial obligation more manageable.
Since banks are less flexible, make it more difficult to get approval, and are tighter with their loan amounts, opting for a private lender or loan provider is often a better option for most people. When shopping around for a medical loan, look for a lender that will give you reasonable rates, fair repayment terms, and helpful resources. Two things you don’t want to do when trying to finance a medical procedure are:
The reason both these options should be avoided is the same: you’ll end up paying astronomical interest rates. When rates are too high, people frequently end up unable to pay the hefty fees, fall into debt, and ruin their credit. That's why these options are not recommended. Instead, opt for a personal loan from a reliable lender, and save yourself thousands of dollars over time, and a huge headache as well.
Medical loans issued by a trustworthy marketplace loan provider or a peer-to-peer lender are the solution many borrowers are looking for to help ease the financial burden of surgery and other medical treatments. Medical loans can be used for a variety of purposes, including:
Before applying for a medical loan, be sure to ask for enough to cover all of the expenses involved with the procedure (for example, transportation), so you are not left with additional expenses to pay in addition to your monthly loan payments.
Applying for a medical loan is easier than ever. In fact, most lending portals have online forms that take just a minute to fill out. Visit the lender’s website, fill out the form, and wait for offers to come your way. Generally, you’ll be asked to provide your name, phone number, address, employment record, credit score, and sometimes you'll be asked to provide proof of employment, like pay stubs.
Once you fill out the initial application, many lenders will give you a pre-approval quote that tells you approximately how much APR you can expect to pay with a loan from that provider. If you see something you like, you’ll go on to the next application stage in which a hard credit pull is done, more specific terms are offered, and the loan is finalized if you are interested.
Using an online loan marketplace means that your application is sent out to several lenders simultaneously, so you’ll receive multiple offers while only having to fill out a single form. It’s also a good way to compare rates, since you have all of the information condensed into a single space. Compare the different offers you receive so that you can select the loan provider that offers you the most competitive rates with the most flexible terms for your situation. This will make loan repayments easier for you and less expensive.
As mentioned, you can also get medical financing for surgeries as well as treatments required. Both surgeries needed for health reasons as well as electives can be paid for with a medical loan. Some of the electives that people use personal loans for are appearance improvement procedures, such as:
Of course, even surgeries covered by your insurance can become expensive between the co-pays, the doctors’ visits, and the prescriptions. As such, you can use a medical loan to pay for surgeries that are covered as well.
The APR is an estimated total of all the payments you will have to make for your loan each year and one of the most important factors to look at when comparing loans. This figure can vary from one person to another and from loan to loan. Generally, the APR will depend on 2 things:
The current national rate fluctuates, and lenders will take this into consideration when charging you an APR. You can opt for 1 of 2 types of loans: fixed rate or variable rate. The fixed-rate loan will lock in an APR, and it will remain at this rate for the duration of your loan. This can be a good choice if the rates are particularly low when you take out a loan. Alternatively, a variable interest rate is one that fluctuates along with the average. That means that sometimes you’ll pay a higher rate, and sometimes you’ll pay a lower rate. If you need to know your monthly payment to the last dollar up front, a fixed rate is a better option for you. Otherwise, a variable-rate loan could potentially save you more in the long run.
Your personal credit history will also play a significant role in determining your APR. People with lower credit scores will receive higher APRs as a rule. However, thanks to FICO 9, creditors are looking at your credit history differently than they used to. Instead of just seeing a score, they'll look at why you have that credit score. If your score is low because you had an unexpected medical emergency in the past that brought down your score, you will be judged more favorably than someone whose score was lowered because they recklessly racked up an enormous credit card debt on unnecessary purchases, for example. Be sure to look at your credit report, take measures to clean it up in any way you can, and remove any fraudulent entries or misinformation before applying for your medical loan.
The APR calculation on personal loans will vary depending on your lender, but it will typically be lower than what you would receive from a payday or short-term loan – usually starting at 10% and capping at 35.99%. It is not ideal to owe any money, but if you require a loan, then a personal loan could certainly be a viable option.
APR rates mentioned include associated fees.
Full repayment for the loans displayed range between 61 days to 180 months.
Representative example: assuming a loan of $10,000 over 60 months at a fixed rate of 3.1% per annum and fees of $60.00. This would result in a representative rate of 3.3% APR, with monthly repayments of $180.80, for a total amount paid of $10,848.00.
The beauty of personal loans is that you can get flexible terms on the loans you take out.
Some providers will let you choose which day of the month you need to make your loan repayment. This is a convenient way to set up your loan payments so that it falls in line with your monthly finances. Other lenders will allow you to switch your payment date if you find that another day of the month is more convenient or feasible.
Pay close attention to any fees being charged by the lender. The presence of a fee such as a closing fee or processing fee isn’t necessarily a deal-breaker, but you want to be aware of all of the fees you’ll be charged up front. Any lender that hides its fee policies is not going to earn trust points. Also, make sure to include the fees when comparing different lenders and rates you receive.
How long you'll have to repay your loan is another important term to consider. The longer you have to pay off the loan, the lower your monthly payments will be. This will obviously make paying off your loan much easier on a day-to-day basis. However, the longer you take to pay off the loan, the more money you end up paying, for 2 reasons. One, because for each month that your loan exists, you need to pay interest, so the longer the repayment plan, the more interest you pay. Two, the longer your repayment plan, the higher your interest rate will be. This is not always the case, but it is the general rule for the vast majority of lenders. If you can afford it, pay off your loan as quickly as possible. If you simply cannot afford high monthly payments, spreading out your loan over several years is a better option.
Another thing to look for is a pre-payment penalty. Some lenders will charge you this fee if you make larger payments than your monthly minimum or if you pay off your loan before the agreed upon date. This is because they are losing out on the interest payments you would be paying if the loan had come to full term. Look for a lender that doesn't charge a pre-payment penalty. This way, if you come into some money down the road or if you can manage a higher monthly payment one month, you can decrease your overall loan payments without being penalized.
A medical loan is an easy way to consolidate all of your medical expenses into one easy to manage payment. It will also help you cover a medical procedure that isn't covered by your insurance or carries more expenses than your finances can handle. Finding a reliable personal loan provider will ensure that you receive fair terms, good rates, and positive experience all around, so read these reviews to get an honest, first-hand perspective on top medical loan providers. Pay off your loan each month responsibly, and your medical loan will even help you build your credit for better rates in the future.
* LightStream Terms and Conditions:
Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.
* Marcus By Goldman Sachs® Offer Terms and Conditions:
For NY residents, rates range from 6.99% to 24.99% APR. Only the most creditworthy applications qualify for the largest loan amounts and lowest rates. Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.
* LendingClub Terms and Conditions:
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 9410
* Eloan Terms and Conditions:
Rates from 7.99% up to 19.49% APR. Your APR will be determined based or your risk score and credit history. Loans start from $2,000 up to $35,000. The loan amount will be subject to credit approval. Eloan is a Division of Banco Popular de Puerto Rico. Subject to credit approval and meeting the parameters set forth by Banco Popular de Puerto Rico (“Banco Popular”). This offer applies to personal loans without collateral. Offer subject to presenting evidence and verification of acceptable income to Banco Popular. Banco Popular may deny your application if you do not meet the parameters and the established conditions. Other terms and conditions may apply.
† Credible Terms and Conditions:
Credible is so confident in the personal loan rates you’ll find on Credible, we’ll give you $200 if you find and close with a better rate elsewhere. See full terms and conditions
‡ Upgrade Terms and Conditions:
Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/.