Top Uses for a Loan —
A medical loan is a personal loan that’s used to pay for medical costs. Personal loans are unsecured, which means they don’t require collateral and can be used to pay for virtually anything, from the medical bills themselves to your living expenses during recovery time.
Medical loans are a good option if you need money quickly for a medical procedure — you may even be able to get funding the same day that you apply for a personal loan.
If you have an upcoming medical procedure and can’t afford to pay the cost out of pocket, medical loans may be able to help cover the bill. But before taking out a loan, consider the benefits and drawbacks and whether another financing option may make more sense.
Medical debt is a complicated issue — and an emotional one.
The medical billing system is complex. It’s not always easy to figure out how much you’ll need to pay to get the care you need. Whether you need treatment for a medical emergency or an elective surgery, paying for an expensive procedure can be tough.
Taking out a loan or opening a credit card for medical expenses may seem like a tempting option, especially if you’re already struggling to pay your medical costs and don’t have the health insurance you need to cover them.
What you should know about medical loans
A medical loan is often another name for a personal loan that’s used to pay for medical expenses.
Personal loans can be used for a range of medical treatments, including elective procedures, fertility treatments, prescriptions, surgeries and more. A number of lenders, including certain banks, credit unions and online lenders, offer personal loans that can be used for medical treatment.
Medical loans may be unsecured personal loans, meaning they don’t require any collateral. Since lenders are trying to judge your ability to repay the loan, applications for these types of personal loans will primarily focus on factors such as your credit history and income.
The amount you may be approved to borrow and the terms of the loan will depend on a variety of factors, including your credit history.
How to compare medical loans
Before signing on that dotted line, you’ll want to be sure you’re getting the best possible offer. Instead of accepting the first offer that comes your way, be sure to compare various packages. Here are a few of the details you should look at closely:
- APR rates: Lenders typically offer a range of APR rates, the lowest of which are often reserved for those with excellent credit and a low debt-to-income ratio (DTI). The higher the APR rate, the more you’ll have to pay over the life of the loan.
- Terms: The terms of a personal medical loan is how long you have to repay the loan. Terms typically range from 12 to 60 months, though some lenders offer longer-term loans. The shorter your loan, the more you’ll pay on a month-to-month basis.
- Amounts: The amount of money a lender will offer a borrower can depend on an individual’s credit score and history. Larger loans are typically reserved for those with higher incomes and excellent credit scores.
- Fees: As you research various lenders, you’ll want to keep an eye out for what types of fees lenders charge. While some lenders avoid fees completely, others may charge origination fees or late payment penalties (or even both). Here are some kinds of fees you should check for:
- Origination fees
- Application fees
- Prepayment fees
- Late fees
- Returned check fees
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