Medical loans: see how to finance your medical treatments
If you need to pay for medical expenses but don't have the money to do it, you should read on to learn about medical loans!
by Thais Daou
Everything you need to know about medical loans
Considering that the cost of health care is an important part of health care planning, medical loans may play an important role in such an essential plan.
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But one thing for sure is important to keep in mind. Healthcare costs are higher in the United States than in other countries. Ultimately, these costs put pressure on the overall economy.
How do medical loans work?
Therefore, the role of a medical loan is to help minimize the reality of these costs. To do this, in addition to financial planning, you need to compare the pros and cons.
These higher costs that we have just mentioned above are viewed by many as unsustainable. So, how about we learn why this happens and why?
Government programs pay for health care. For example, Medicare and Medicaid. But also by private health insurance plans, which can be paid for by an employer or one’s own income.
Overall, in the United States, health care is technologically advanced but expensive. For instance, healthcare costs in the country totaled about $3.6 trillion in 2018.
Moreover, the amount spent per person on health care is higher in the United States. And the percentage of gross domestic product (GDP) spending on health care is much higher than in other countries.
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Medical loans can be a synonym for easy application, faster approval, and quick payment. Definitely, a good loan will provide you with that.
Another positive aspect is that now there are a series of lenders in the market. That is, the number of competitive interest rates and flexible repayment options has also increased.
They also cover medical procedures that health insurance usually does not pay for. For example, cosmetic surgeries, dental procedures, fertility treatments, and bariatric procedures.
Medical loans are meant for you to pay for those medical expenses which are not covered by health insurance plans. Medical loans are for everyone!
If you decide to get a loan on your own, there is another pro. Also, hospitals may be willing to give discounts if you are paying out of your pocket. If you have insurance, hospitals may not give discounts.
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Let us now look the other way around. Depending on the lender you choose, waiting periods may be lengthy. So, first of all, choose terms and conditions wisely.
As for coverage, medical loans may refuse certain procedures. Especially if your lender sees the procedure as medically unnecessary.
Therefore, ask yourself, and even your doctor: what do I need this loan for?
In other words, you will be slightly limited. This is because these loans will only cover health expenses and procedures that are specified in your policy.
The other big downside is that they are an expensive way to get a loan. Depending on the terms you get, you could pay a lot in interest over several years.
How much can you borrow with a medical loan?
For us to talk about amounts borrowed for health purposes, we also need to talk about interest rates. So, what are the interest rates commonly charged with medical loans?
Answering this question, interest rates on medical loans can range anywhere from 4.99 percent all the way up to 35.99 percent.
This information is important because the amount you can borrow will influence the amount of your debt.
Now, moving on to loan amounts. They range from $1,000 to $40,000, with term lengths from three to five years. Be aware, however, of the terms and conditions for your state.
As for APR and fee, the former ranges from 7.04% to 35.89%, and the latter from 3% to 6% of the loan amount.
What can you use a medical loan for?
Medical loans can be used to cover any medical expense. Furthermore, there is no waiting period for them.
For example, they can help pay for medical bills, treatment and recovery costs, medications, and health needs while traveling or taking time off work.
Many medical loans have no ties to specific healthcare providers. Meaning that you can borrow money for dental loans, cosmetic surgeries, or any other purpose.
Where can you apply for a medical loan?
The answer to this question is: it depends. And this is because such an answer will vary greatly depending on where you currently live.
Therefore, we advise you to look for personal loan providers with options available in your region. Some options include joint loans, loans for low rates, thin credit, or bad credit, among others.
What credit score do you need to apply for a medical loan?
This is an excellent question! Because one’s credit score is an important factor in determining whether you are eligible for a loan. Not to mention how much one will be able to borrow.
Regarding loans for bad credit, if your score is 689 or lower, you may be charged with a high APR. In other words, you will have to pay more interest over its term.
But if you currently have bad credit and need medical assistance, do not worry. You can always work on improving your credit.
And you can do so by reviewing your credit report, adding a co-signer, and getting pre-qualified.
Overall, to avoid going through too many steps, we recommend keeping your credit score at 750 or higher. This way, any provider will likely charge you an affordable interest rate.
Learn more about other loan options: auto loans
Now that you’ve learned more about Medical Loans, you can start learning about other loan types, such as auto loans.
You can find your dream car and may not have enough money to pay for it. So, with an auto loan, you’ll be able to get the car you need!
So, check out our post below to learn more about this type of loan and how you can get one!
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