You can get a personal loan for medical expenses from banks, credit unions, and online lenders. Some lenders specialize in financing medical expenses. If you have good to excellent credit, you'll be entitled to the lowest interest rates. However, many lenders also work with borrowers who have fair or bad credit.
If you have medical debt, you may have difficulty meeting your various payments. And in that sense, a personal loan could help. Using a personal loan to settle an accumulated medical debt in one fell swoop makes sense for patients seeking to leave behind discrete medical events. Like medical procedures themselves, medical credit cards come with some inherent risks that you should be aware of.
However, once you have what you think are your final numbers, it's worth seeing if a personal loan makes it easier to manage your healthcare debt. Income-based plans for difficult situations forgive part of your medical debt and divide the remaining amount into monthly installments to make the debt manageable based on your income level. Unlike personal lines of credit, which have more flexible terms and repayment requirements, personal loans are installment loans with a fixed monthly payment and term. Applying for a personal loan in installments to cover medical expenses isn't ideal, but it's better than having high-interest credit card balances or not paying existing medical bills.
This is the perfect time to challenge any inaccuracies in your medical bills and negotiate with creditors. Personal loans have fixed interest rates, so your monthly payments won't change during the life of the loan. Assuming your interest rates don't change, shorter loan terms mean higher monthly payments and lower total interest charges. Keep in mind that if you consolidate your medical debt with a personal loan or a credit card with a balance transfer, you are likely to lose the protections described above, since your loan will no longer be classified as medical debt.
While bankruptcy is a last resort, it could make sense for consumers who are completely overwhelmed by medical debt. To qualify for a medical loan from these or other lenders, you'll usually need good to excellent credit, as well as verifiable income. Those that do require you to incur new debt may have lower total costs or more favorable loan terms than unsecured personal loans. If your credit isn't that good, you're more likely to be asked to deposit a valuable asset, such as a vehicle title, to secure your loan.
You can do this with a personal loan, a credit card with balance transfer, a home equity loan, or a 401 (k) loan. Even worse is choosing between the medically necessary treatments recommended by your care team and your creditworthiness or that of your family.