What Are Medical Loans And How Do They Work?

If you have or expect to have a large medical debt, you may want to take out a personal loan known as a medical loan. Even if you have health insurance, you could still end up with a large debt under certain circumstances. Medical loans can help you manage your expenses and allow you to pay for them at a reasonable pace. However, they are not for everyone. Keep reading to learn more about personal loans for medical debt and what they are best used for.

What Is a Medical Loan?

A medical loan is a type of personal loan used for medical expenses. You may be able to pre-qualify for these loans. You can either obtain an unsecured or a secured loan. Most lenders treat medical loans similarly to any other type of personal loan with similar interest rates and conditions. You may only be able to draw out a limited amount of funds.

Why Do People Need Medical Loans?

Health insurance is not all-inclusive. If you have high deductible insurance, you could use your loan to cover those expenses. Some examples of what health insurance may not cover include:

  • Elective surgeries, including LASIK
  • Cosmetic surgery
  • Extended stays in hospital
  • Private nurses and hospital rooms
  • Fertility procedures
  • New drugs and procedures
  • Travel for treatments

Who Best Qualifies for Medical Loans?

People who have good credit will more likely qualify for an unsecured loan at a favorable rate. If you have poor credit, you may still qualify for a secured loan at a higher rate. Some lenders require collateral for loans above a certain amount.

What Are the Pros and Cons of Medical Loans?

Medical loans may be beneficial for some of the following reasons:

  • You won't have to drain your savings
  • You can use them for a variety of medical or personal expenses
  • You may not need collateral, so you aren't at risk of losing property
  • You can usually get one quickly
  • You may get a better interest rate compared to credit cards

The cons of medical loans may include:

  • Poor credit may result in a loan denial or a very high-interest rate
  • Banks will limit amounts, so you may not get all the money you need

You can usually obtain a medical loan through a bank or other lending institution. Many lenders treat them as standard personal loans and often have restrictions and conditions. Be sure to ask questions about who gets paid the money and all the terms. If you think a medical loan will work well in your case, talk to a personal loan lender, such as Ardmore Finance, for more information.