The healthcare sector is always evolving but it is also always getting more expensive. Fortunately, these medical loans can make it easy to afford medical procedures.

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Over the years, the cost of healthcare in the U.S. has skyrocketed. And today, about three-quarters of the population cannot afford proper medication. Typically households spend between $1,500 and $5,540 per year on  health expenses depending on the state you live in, says a 2019 Commonwealth Fund report. 

This price tag is even higher for individuals without good health insurance. In fact, the National Cancer Institute says that treatment for certain cancers types can cost an upward of up to $100,000 or even more in a year. 

If your health insurance does not cover your full medical bill, and you have no money left in the bank to save the day, a medical loan can come in handy. Here are all the details you need to know before getting a medical loan. 

Medical Loans – What Are They?

They are special types of loans taken to cover health care costs. With the rising need for medical care, these loans are available on many online platforms and medical institutions. A medical loan will help to ease your financial burden, especially during expensive treatment procedures. 

In most cases, medical loans are collateral-free or unsecured. Therefore, if you default, the lender or bank will not re-claim your car or take your property. But there is a downside to these loans. You need a good credit score and you might incur higher interest rates. And if you have a poor credit score, chances are you will pay higher origination fees. 

Perks of Medical Loans

Medical loans are extremely helpful, particularly if your health insurance cannot cover you and you need to pay huge hospital expenses. Instead of saving up for a medical procedure for years, you can get this type of loan, get treated immediately, and improve your quality of life. 

When you select the best medical loan, you will get to cover your health bills, irrespective of your medical condition. What’s more, you will enjoy a flexible repayment plan. Furthermore, early medical intervention can save you from chronic pain and even death. 

Who Offers Medical Loans?

Like regular personal loans, you can get medical loans through online lenders, banks, hospitals, and specific credit unions. While applying for the loan is a hassle-free process, you might need to meet a few requirements. To qualify for medical loans, applicants require an excellent credit score. Otherwise, they might incur high origination fees. 

Some healthcare providers might also offer patients medical loans. That’s true for providers offering expensive elective procedures like plastic surgery. Most insurance companies offer no cover for such medical procedures. As a result, patients often pay out-of-pocket. Doctors understand this, that is why they often present patients with more financing options.

How to Know Which Medical Loan to Choose 

Before choosing a medical loan to finance your bills, ask yourself the following questions: 

• Is the interest rate too high? Most medical loan interest rates vary between 4.99% and 19.99%. According to the Federal Reserve, In August 2020, the average APR rate of two-year personal loans was 9.34%. So, if a loan has a higher APR than you can afford, you need to reconsider. 
• What other alternatives are there? Do not settle for medical loans without looking for other available options that may be cheaper. 
• Who receives the money? Do you receive the money or does the lender send it directly to the doctor? 
• What are the repayment options? Can your budget accommodate the monthly repayments? If not, can you adjust your expenses?
• What is the total interest? It’s crucial to know how much interest you will pay over the life of the loan. This way, you can determine whether you should take the loan. 

Other Options

Medical loans might sound like the only way to cover healthcare bills. But that’s not the case! There are several worthwhile alternatives you need to consider, including: 

Getting Professional Help 

Navigating the U.S billing and payment system is no simple process. If you’re not an expert, consider getting help from a medical billing advocate. 

These individuals help you find errors in your medical bills that can cost you lots of money. They will read each line carefully and identify details that don’t add up. Besides that, these experts will help you negotiate payment plans or reduced fees with the health providers. 

The best part, medical billing advocates offer their services at an affordable cost. While others might charge you based on hourly rates, hiring them will help you save time and money. 

Ask For Payment Plan from the Hospital 

Before taking any medical loan, consult your medical provider first. Most hospitals understand the struggle patients go through to clear their expenses. As such, there are quite willing to work with them to design a favorable payment plan. 

A payment plan from your health provider means you can maintain good health while working towards your repayments. All without the fear of exorbitant interest loans. And the best part, sometimes you can ask for extensions. 

Medical Credit Cards to the Rescue 

If your health provider refuses to work with you on a payment plan, a medical credit card like CareCredit can makes an excellent alternative. These cards work like any other credit card but only pay for medical services. 

Before getting a medical credit card, ensure the card is acceptable by your practitioner and it can cover the expenses of your medical condition. Medical credit cards are more effective when used for frequent treatments such as allergy shots and others. 

However, when compared to medical loans, these credit cards are more expensive. That’s because they often come with high annual percentages rates (APRs), ranging from 4.99% to 35.99%. 

Alternatively, you can check out zero-financial promotional deals. They offer deferred interest cards but don’t confuse them with 0% APR credit cards. The deferred interest here means users will not pay any interest as long as they clear all their bills by the end of the promotions.

Ask For Help from Hospitals and Charities 

If you have a huge medical bill and nowhere else to turn, seek assistance from your hospital or a local charity organization. Most health institutions have money set aside for patients who cannot afford their medical bills. Consult your doctor’s office and see if you can get financial aid. 

There are also several NGOs and charities (at state and local levels) willing to settle your bill if the need arises. Examples of these organizations include Patient Access Network and HealthWell Foundation. 

Some charities can cover all your medical bills if you qualify. Others cover only specific medical conditions like cancer or work with people of a certain age (children or seniors) or individuals in certain careers. 

With a little research and persistence, charities could provide you with all the help you need without taking a single coin from your pocket. 

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Final Thoughts

Medical loans are efficient and faster to process than any type of loan, meaning that it is the best option for emergency medical services. Don’t suffer paying huge medical bills when you can use the options above to save money and enjoy quality health care.