Paying for good health can cost a pretty penny, especially if it’s unexpected. Despite having health insurance in the United States, sometimes people can still end up with thousands of dollars in medical bills since not all costs are covered. And those that do not have good health insurance can wind up seeing $100,000 treatment costs, especially for cancer.
For people to pay for medical debt, medical loans offer a great way to pay for such expenses allowing patients to access affordable healthcare.
Here are some things to consider about medical loans.
What is a Medical Loan?
Medical loans are similar to personal loans but can only be used for medical treatment and purposes. It helps consolidate a large accumulation of medical debt that patients can’t pay for at once into smaller monthly payments. Some procedures that medical loans are used for include:
- Vision and eye procedures
- Prescriptions
- Cosmetic surgery
- Dental work or orthodontics
- Weight loss treatment
Advantages of Medical Loans
- Less stress: Medical loans are a great alternative to rapidly depleting personal emergency funds or building credit card debt. It alleviates the financial burden of paying a large sum of cash flow in a short period of time.
- Variety of payment terms: Based on which loan program, repayment terms can range from 36 to 60 months; this allows patients to plan accordingly for which billing plan works best for them.
- Affordable: Medical loans are far more affordable than using a credit card to cover the cost of medical treatment since credit card interest rates can average around 16%.
- Different uses: These loans allow patients to use the funds for either elective or cosmetic procedures.
- Health first: Medical loans allow patients to get needed medical care.
- No collateral: Typically, medical loans are unsecured loans, meaning people do not need to put up any collateral, such as a house or a car. This makes them safer if patients end up defaulting on loans since items won’t be repossessed.
Disadvantages of Medical Loans
- Need good to excellent credit: People with bad credit may find getting approved challenging or wind up with higher interest rates than those with better scores.
- Increase debt: Medical loans are still loans and will add to a person’s overall debt, which can strain monthly expenses. Late payments will also negatively impact credit scores, making it more challenging to take out future loans.
- Possible high fees: Like traditional loans, medical ones will also have fees and penalties such as the application, late payments, or prepayment penalties.
Who Best Qualifies?
Medical loans are the best fit for people with a good or excellent credit history, ranging from 670 to 739. The higher the credit score, the lower the interest rates.
People with bad credit often find it harder to get medical loans; however, some lenders offer loans except with higher interest rates at a cap of 35%.
How you can apply
Here are some easy steps to determine which medical loan fits your situation:
- Determine Amount: The first step is to calculate how much money you need to borrow and the amount that is affordable to you. Be sure to keep in mind the rest of your monthly costs and what you are comfortable with spending.
- Check credit score: Review your credit score because the best interest rates and terms will be stemmed from your credit history. If your credit score isn’t the best, try paying other debt and making payments on time to improve your score.
- Research multiple lenders: It’s important for you to be familiar with the available medical loans since interest rates and terms may vary for each lender. Get quotes so that you’re able to get the most affordable deal.
- Select lender: Once you have finished your research, select the best lender for you. Often loan applications will ask for proof of income and employment. Once completed and approved, funds should be available within one business day.
Medical loans are available through traditional banks and online lenders, similar to regular personal loans.
Have bad credit? Consider Denefits for financing.
For those having trouble qualifying for medical loans because of bad credit, consider using Denefits. There are no credit checks, allowing instant approvals for everyone. Because there are no credit checks, Denefits report the payments to credit bureaus, allowing patients to slowly rebuild their credit. The service offers patients with bad credit medical treatment for lower interest rates over a selected amount of time.
Overall, putting health first is essential for avoiding serious illness later, but the thousands of dollars in medical bills may be unattractive to most people. With medical bills being the highest expenses for most Americans, it’s crucial to research which medical loans are most beneficial. In the end, having to pay bills later helps ease the financial stress.
The post Medical Loans: Pay Healthcare Debt Later appeared first on Denefits.
