Yes, you can apply for a personal loan to pay for just about anything. It's not insured, which means there's no guarantee. Personal loans for medical expenses are backed by a promise to repay the lender; as a result, interest rates may be higher than those of a secured loan, which uses an asset as collateral. A medical loan is essentially a personal loan that is requested for the specific purpose of funding medical treatment.
Medical loans can cover a variety of medical costs, such as elective surgeries, IVF treatments, and emergency procedures. Medical loans are probably the most expensive way to cover your medical costs and are best considered only after you've exhausted other options, including payment plans and medical credit cards. Some lenders who otherwise wouldn't accept candidates with poor credit scores may allow you to get a secured loan for medical expenses, which may be a good deal, but you'll have to put something valuable in collateral. You might be surprised to discover that working out a payment plan directly with your provider may be the most affordable medical loan funding option.
Other ways to manage debt include trying to work out a payment plan, hiring a medical bill lawyer, or requesting a debt settlement. In the case of personal loans, the APR ranges from 8.30% to 36.00% and the origination fee ranges from 3.00% to 6.00% of the loan amount. By using any of these methods to consolidate medical bills, the issuer of the new loan or credit card pays off existing debts, which are then combined and owed to the new lender, ideally with a lower APR. However, unsecured personal loans for medical bills are usually best suited for those with good credit ratings and can get a good interest rate.
For some, medical loans aren't the right option, either because of lack of time or because of credit requirements. Medical loans can be a good alternative for exhausting emergency savings or accumulating credit card debt. Combining medical debt with other purchases makes it more difficult to keep track of tax deductions or a health savings account, Glosser says. An unsecured loan is a loan that doesn't require you to provide security (such as a motor vehicle) to the lender.
Medical loans can be used to pay for medical expenses such as emergency room visits, checkups, or dental work. While a medical loan might be a better option for covering medical bills than credit cards, it's a good idea to first consider less expensive options, such as a payment plan through your healthcare provider. That said, if you don't have a high enough credit score to qualify for an unsecured loan for medical expenses and you don't want to provide collateral for a secured personal loan, there are a few other avenues you can take. However, the best way to get medical loans for surgery is to apply for them with one of the best personal loan providers, such as LightStream or American Express.