How to Get a Medical Loan

Medical debt is a big problem in the United States. In fact, statistics show that one in five working-age Americans has problems paying medical bills. The best solution, of course, is to have adequate health insurance for protection and to avoid medical debt.

But this is not always available for everyone. Some find themselves looking into medical loans. Learn more about it below if you are also considering this option to pay for your hospital bills.

Medical loans, in brief



This is a kind of personal loan that you can apply for to finance medical procedures, medical debt reconciliations, optional surgical procedures, out of network charges, or other medically related costs that are not covered by your health insurance. Taking one out can help you manage your healthcare costs and allow you to receive the medical care that you need. Here are more advantages of medical loans:

  • You may receive funds faster than if you wait for your insurance to decide whether a procedure is covered or not;
  • It does not require collateral if you get approved for an unsecured medical loan;
  • It may not impact the credit utilization ratio on your credit report;
  • You may get better finance options and rates;
  • The funds can be used to cover other medically-related expenses.

To apply for a medical loan, the process is similar to applying for any type of credit. Just be on the lookout for high-interest rates.

How to compare medical loans

1. Check the Annual Percentage Rate or APR

The APR has a big impact on how much money you will pay monthly and how much the medical loan will cost you in total. A really low-interest rate may be as low as 5%, but many medical loans have interest rates of up to 30%.

2. Be on the lookout for interest-free periods and origination costs.



Some loans offer a grace period where you will not have to pay interest up to 18 months. It is worth shopping around to find such a deal.

Meanwhile, origination costs pertain to one time charges that the lender may charge for processing the loan. The total cost depends on the value of the loan as it is a  percentage taken from the loan value. It is included in the APR calculations.

3. Choose between a variable or fixed interest rate.

With a variable interest rate, the interest charges over the term of the loan. This can affect your payment schedule, monthly payments, and how long it takes to repay the loan.

On the other hand, a fixed interest rate allows you to determine exactly how much your loan is going to cost you over the given term. This may help better in your budgeting because you always know how much your loan payments will be.

4. Be smart about the term of the loan.

Remember that the longer the term of your loan, the more expensive the total cost will be, regardless of how small the monthly payments seem to be. Be sure to find out what your options are and find something that works best with your budget.