Medical Loans

Personal loans for Medical Financing

You can get medical financing by shopping for unsecured loans, also called personal loans or signature loans. This lets you borrow money without putting up any collateral. LendingTree, a loan comparison website, allows you to view personal loan offers from up to five lenders — simply fill out our online form. 

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What is a medical 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 be able to get funding the same day that you apply for a personal loan.

How to get a medical loan

You can get a medical loan just like any other type of personal loan: through your bank or an online lender. Shop around for the best interest rates for your financial situation using LendingTree’s personal loan marketplace.

If you want to compare lenders, you can fill out LendingTree’s online form to compare offers from up to five different lenders. Prequalification does not affect your credit score.

Reasons you may need medical financing

Medical loans can be used to pay for virtually any type of procedure or treatment, from emergency room visits to wisdom tooth removal. You could consider opening a personal loan to cover:

Chemotherapy, dialysis and other ongoing medical treatments

Long-term care, such as physical therapy and rehabilitation

Urgent care bills from unexpected medical emergencies

Infertility treatment, in vitro fertilization

Hair loss replacement, hair restoration

Weight loss surgeries, like gastric bypass or bariatric procedures

Dental procedures, veneers or orthodontics

Cosmetic surgery procedures

Pros and cons of medical loans

Pros
  • Repay medical debt with a fixed interest rate and fixed monthly payments
  • You can get the funding you need quickly, sometimes on the same day you applied
  • You can use the loan to pay for virtually anything
  • You can request a loan for the amount you need, whether that’s as little as $1,000, up to $100,000 or more
cons
  • You’ll pay interest; other financing options may require no interest or less interest
  • Those with low or no credit will see high interest rates, if they’re approved at all
  • You may have to pay a loan origination fee of about 1%-8% of the cost of the loan, as well as a prepayment penalty if you pay off the loan early
  • You may not find a personal loan small enough for the procedure you need

Medical loans for bad credit

Even if your credit score could use some work, there are still medical loans for bad credit out there for you to utilize. Unfortunately, these types of loans usually come with high interest rates if your credit score is less than ideal — say, a FICO Score below 670.

If you have bad credit, before signing up for a medical loan, heavily consider your options — such as getting a medical credit card or working with your health care provider — as well as any potential benefits and downsides.

Pros and cons of medical loans for bad credit

Pros
  • Loans can be funded quickly, sometimes the same day of loan approval.
  • Payments are generally the same every month.
  • Lenders offer a variety of repayment terms.
cons
  • Interest rates can be high, sometimes 35.00% or more.
  • Fees may be applicable for this product.
  • Your credit score may take a dip from a hard credit inquiry during the application process.

Alternatives to medical loans

Negotiate medical bills

As soon as you get your medical bill, it’s good practice to call the billing department to try to negotiate the balance down. This is particularly helpful if you don’t have health insurance or if you had to get services from an out-of-network provider. You could even consider negotiating the bills down if you do have insurance but are still left with an expensive bill.

Review your bill for errors

The clerks at medical billing departments aren’t immune to errors. As an example, the Centers for Medicare & Medicaid Services estimated a 6.27% error rate in 2020, just for Medicare Fee-For-Service alone.

Before you pay a bill, review it to make sure there aren’t any coding or clerical errors. You might consider going through a third-party service that will review your bill for errors, such as Compass Healthcare Navigation Solutions or CoPatient. Keep in mind that these services may come at a cost.

Set up a payment plan

Your hospital’s billing department may be willing to negotiate a no-interest payment plan to pay off your medical debt. These plans may be available without any eligibility requirements, so even if your income is too high to qualify for bill reduction, you still may be able to enter a payment plan.

Open a medical credit card

In lieu of a payment plan, your health care provider may work with a third-party service to offer deferred-interest financing options. For example, some providers utilize CareCredit, which offers no-interest financing as long as you pay off the procedure within a certain time frame.

It’s important to keep in mind that medical credit cards offer deferred interest, not zero interest. This means that if you don’t pay off the medical bill within the promotional period, then you’ll be hit with all of the interest that accrued from the original purchase date.

Use a credit card with a low introductory APR

You may get more favorable terms if you find a credit card with an introductory 0% APR offer. And if you have good-to-excellent credit, you could even earn cash back or travel miles using a rewards credit card with a promotional, no-interest APR period.

However, this option may not be available to those with low or no credit. Plus, this has the same pitfalls of other deferred-interest credit cards: If you don’t pay off the balance within the promotional period, then you could end up paying sky-high interest rates.

How to prequalify for medical loans

By prequalifying for a loan, you will be able to compare lenders’ rates for medical loans more easily. When you check to see if you prequalify, lenders typically do a soft-credit check on your records so as not to impact your credit score.

Lenders will weigh factors, such as your credit score and history, income and debt-to-income ratio to determine whether you are eligible for a loan. Once you’re prequalified for medical loans, you’ll want to compare details such as loan terms, APR rates and loan size. By doing this, you could end up saving yourself thousands of dollars in the long term.

See how comparing APR rates affects the overall cost:

Cost savings between two personal loans with different APRs
Loan amount $20,000 $20,000
Loan length 5 years 5 years
Estimated APR* 10.50% 15.50%
Monthly payment $429.88 $481.06
Amount paid in interest $5,792.68 $8,863.83
Total cost of loan $25,792.68 $28,863.83
*APRs used are for demonstrative purposes only

FAQ: Medical loans

Yes, a personal loan can be taken out to pay for virtually anything. It’s unsecured, meaning there’s no collateral. Personal loans for medical bills are backed by your promise to repay the lender, and as a result, 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 will pay much higher interest rates than a person with a strong credit profile. 

Certain lenders grant personal loans specifically for good, fair or bad credit.

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.

There are a few things you can do if you can’t afford your medical bills:

  • Negotiate the balance down with the hospital’s billing department
  • Open a personal loan to pay the balance
  • Pay your medical bills with a credit card

First, you can contact your creditor’s billing department (like the hospital, lab or doctor’s office) 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 monthly payment, then a personal 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.

Medical bills are a civil debt, so it’s not a crime if you don’t pay them. However, you may go to jail for ignoring a court summons, depending on the state in which you live. This happens when you’re sued by a collector, such as a hospital or ambulance service, and you ignore your court date.

Mortgage lenders look at a number of factors: your credit score, your recent mortgage applications, your job changes. But most importantly, they look at your debt-to-income ratio. Medical debt does factor into your DTI. 

Unpaid medical debt can also have a negative effect on your credit score, which can affect your ability to qualify for a mortgage.