Medical loans are unsecured loans that are offered by banks, credit unions, and other finance companies. People may take out medical loans for a variety of reasons such as for:
- Orthodontics, veneers, or other dental work
- Cosmetic or plastic surgery
- To cover different expenses associated with adoption
- In-vitro fertilization, infertility treatments, and/or other pregnancy-related treatments
- Bariatric medical procedures, gastric bypass, or other weight loss surgeries
- Hair restoration or hair loss replacement
Even though it is a legal requirement of all Americans to have health insurance, different survey reports have shown that over 40 percent of Americans between ages 18 and 34 years remained uninsured as of mid 2014. Even in case of individuals who have health insurance, there can be a rapid increase in the medical expenses to be paid by them due to the co-payments, deductibles, and charges disallowed by the health insurer. As of late 2014, it was reported that the credit report of over 40 million Americans featured past due medical debt records.
Medical loans can help cover the medical costs not paid by the health insurance company. It may also help prevent more issues when unpaid bills get sent to collection agencies.
It is important for all to peruse through different kinds of medical loans from different lenders to ensure that you find one which best meets your medical payment requirements. After selecting a specific kind of medical loan financing, you have to compare the terms, interest rates, and associated fees, charges, etc. Compare the APR (annual percentage rate) for all kinds of medical loans that you are looking into. It may be noted that the APR consists of the costs, interest rate, and fees which are shown in the form of an annual percentage of the medical loan amount.
During the review process, you may come up with many questions. Note down the questions, call up the lenders, and clarify those questions with them. Ensure that you have all the necessary information and have all your questions satisfactorily answered before choosing a lender.
Different medical loan options
Unsecured personal loans can help pay for medical costs at an interest rate that is lower than the interest rate of credit cards. Since personal loans are unsecured, you do not need to offer collateral and there would be no seizure of any of your assets like your home, etc.
A personal line of credit can help plan and manage your medical expenses within a specific budget. Funds for medical expenses can be drawn against the line of credit as and when needed, and burrowers will only need to pay the interest on the money that was withdrawn. The principal amount withdrawn on the line of credit has to be repaid within a stipulated time period; else extra charges may ensue for replacement or renewal of your personal line of credit.
Some hospitals or healthcare providers may offer in-house medical finance options. But these often come with increased fees and interest. It is best to shop around for medical loans with the lowest interest rates and fees, etc., and not feel pressured to opt for the in-house financing.