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On this page
What is a medical loan?
How to get a medical loan
Comparing medical loans
Reasons you may need medical financing
Pros and cons of medical loans
Medical loans for bad credit
Alternatives to medical loans
How to prequalify for medical loans
How we chose our picks for best medical loans
Frequently asked questions
A medical loan is a personal loan for medical costs. Personal loans are often unsecured loans, which means they don’t require collateral and can be used to pay for virtually anything, from medical bills to your living expenses during recovery.
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 you apply for a personal loan.
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:
Yes, many lenders let you take out a personal loan to pay for medical expenses. There are generally few limits to personal loan uses. They’re unsecured, meaning there’s no collateral. Personal loans for medical bills are backed by your promise to repay the lender. Interest rates can be higher than they would be for a secured loan, which uses an asset as collateral.
A medical loan is a type of personal loan, so it falls under the same guidelines. Without good credit, you may have trouble qualifying for a personal loan at all. If they are approved, those with bad or no credit are likely to pay much higher interest rates than a person with a strong credit profile.
Certain lenders grant bad credit loans, fair credit loans and excellent credit loans.
As soon as you get your hospital bill, call the provider’s billing department. Many medical offices offer bill reduction and sometimes even forgiveness, depending on your ability to pay the balance.
Some hospitals even have financial assistance programs to help people who can’t afford the care they need. You may qualify if you’re uninsured or if you owe a significant amount after insurance.
You can negotiate the balance down with the hospital’s billing department, open a personal loan to pay the balance or pay your medical bills with a credit card.
First, try contacting your creditor’s billing department (your doctor’s office, a hospital, lab or similar facility) to try to negotiate the balance down. Hospital bill reduction is common, so give this a try before exhausting your other options. You may also be able to set up a no-interest payment plan through the medical provider.
Another option is to open a personal loan to pay your medical bills. You’ll end up paying interest on a personal loan, which means that the bill will cost more over time — and if you have poor or no credit, you may not qualify for a personal loan at all. But if you need quick funding and want a set personal loan monthly payment, then a loan can be a good option.
Finally, you can pay with a credit card. Some doctors’ offices partner with medical credit card companies, like CareCredit, which offer deferred interest for a set amount of time. However, if you miss payments or don’t pay off the balance by the end of the grace period, then you’ll end up paying interest and penalties.
Mortgage lenders look at a number of factors — credit score, recent mortgage applications and job changes, among them. But most importantly, they look at your DTI ratio.
Medical debt does factor into your DTI. In addition, unpaid medical debt can also have a negative effect on your credit score, which can affect your ability to qualify for a mortgage.