The healthcare system in the US is known for its complexity and high cost. Any illness or doctor visit can result in costly bills and stress for most Americans due to the need to cover medical expenses without health insurance. The situation is incredibly challenging for individuals with poor or no credit, as borrowing money from banks or credit unions is unavailable. So, how to get a medical loan with bad credit? Keep reading to discover the best medical loans and other medical financing options for low-credit borrowers!
What is A Medical Loan?
Medical loans are a type of personal loan used to cover medical expenses. Unlike other personal loans, this financing option charges a lower interest rate and has less strict requirements for people with a good credit history. However, it is essential to note that medical loans may often be expensive for those with less-than-stellar credit. Therefore, checking your credit report before applying for a loan is crucial.
How Do Bad Credit Medical Loans Work?
Bad credit personal loan funds are deposited to a borrower’s bank account in one lump sum and can be used to finance medical expenses or consolidate existing medical bills. Unlike other types of loans, bad credit medical loans have fixed interest rates varying from 6% to 36%, which allows borrowers to calculate how much they need to repay.
The repayment terms of medical loan proceeds are flexible and typically range from 12 to 84 months. It allows people with poor credit to return the funds for a more extended period in an affordable monthly payment. In contrast, people with good credit scores can pay off the debt earlier, saving on paying interest rates.
Personal loans allow borrowers to access loan amounts ranging from $500 to $50,000 and, in several cases, up to $100,000. The loan amount you can get is determined by your credit score, with higher scores qualifying for more significant loan amounts.
It is important to compare different personal loan lenders to find an option with the lowest interest rates, largest loan amounts, and the most convenient loan terms.
Why Should You Apply for A Bad Credit Medical Loan?
Bad credit medical loans are an excellent solution when you need to pay medical bills for cosmetic surgery or other medical expenses but have no opportunity. For example, your family or friends can’t help you, and your low credit score makes borrowing money from most financial institutions unavailable.
The situation becomes incredibly complicated when you need to pay for dental care, as it is one of the most expensive medical costs. While most lenders require a credit score 670, you can also find dental loans for bad credit with lower requirements from alternative lenders. Due to the minimum credit score requirement, a bad credit medical loan charges a high-interest rate, so before applying, ensure you can repay it on time. Compare different loan providers to find the most suitable option for your purposes.
Pros of Medical Loans
Medical loans are an excellent way to cover medical expenses, allowing even bad credit borrowers to get approval. Pay attention to the main advantages of these unsecured personal loans to get the entire picture of this financing option for medical or dental procedures.
- The opportunity of getting quick cash to pay medical bills;
- Fixed interest rates, lower than in credit cards or other loans;
- Available large loan amounts;
- Equal monthly installments;
- Flexible repayment terms;
- No prepayment penalties for paying off a loan early;
Cons of Medical Loans
While applying for a bad credit medical loan is an excellent way to cover your unexpected medical expense, it is essential to remember the following drawbacks of these bad credit loans:
- Origination fees of 4,25% to 8% charged;
- The possible high-interest rate for borrowers with fair credit scores;
- Expensive loan for a long-term period.
How to Choose the Best Dental Loans for Bad Credit?
Comparing various medical loans, including endocrinology medical billing and dental loans, for bad credit is essential before sending your loan request. To find the best dental loans on the most favorable terms, analyze the following factors:
- Deposit time: It may be necessary to compare the deposit time from different lenders if you need loan funds immediately. Several lenders can transfer the money on the same or the next business day, while others may need a few days.
- APR: If you have unpaid medical bills, it is essential to avoid applying for the first loan you see, as they often have too high-interest rates and expensive extra fees, such as origination fees, late fees, or late payment fees. You can find personal loans with interest between 6%-36%, an origination fee ranging from 0% to 8%, and a late fee of $15 or 5%.
- Loan term and monthly payment: Your loan term affects the amount of your monthly payments, making shorter loans cheaper options, while loans with more extended repayment periods require higher monthly payments and interest.
How to Apply for Medical Loans for Bad Credit?
The application process for bad credit medical loans is straightforward and requires four simple steps.
Step 1. Check your credit score
Your credit score is the most important factor for lenders when making loan decisions. The higher your credit score, the higher your chances of getting approved. Furthermore, a good credit score helps people get better loan terms and higher loan amounts. Less qualified borrowers can increase their approval chance by offering collateral or using a cosigner when applying.
Step 2. Determine the necessary loan amount
You need to determine how much loan funds you need depending on your medical expenses. However, it is important to remember that the available loan amount depends on a specific lender’s minimum credit score requirements. Furthermore, consider all the additional charges, such as a late or origination fee, to understand the final loan costs better.
Step 3. Prequalify for a Loan
Although many lenders offer personal loans for bad credit borrowers, it may take time to find worthy options. While several lenders offer favorable loan terms and low interest, others are too expensive and may result in falling into a cycle of debt. Therefore, it is essential to compare different lenders to get the best personal loans from the most reputable loan providers.
Step 4. Apply for a Loan
After you choose a loan provider, you can fill in a loan application form and send your loan request to a lender. If your request is approved, a loan provider will contact you and sign a loan agreement. It is important to read the contract carefully before signing, paying attention to the loan terms and additional costs, such as an origination fee, late fee, prepayment penalty, etc. If you agree with all the lender’s conditions, sign an agreement.
Alternative Ways to Cover Medical Costs
If you receive a medical bill you can’t pay, there are many financing options besides personal loans for bad credit.
Negotiate Your Medical Costs
If you see you can’t pay for your medical procedure and applying for medical loans for bad credit is too risky, you can try to negotiate with your healthcare provider to reduce your bills or even forgive your debt.
Explore Financial Assistance Programs
Several medical providers offer their clients programs to help them to repay their debts.
Create a Payment Plan
If immediate repaying the debt is complicated, you can create a repayment plan with your medical provider. Such plans allow you to return the money in small monthly installments with no interest rates.
Apply for a Credit Union Loan
There are safer ways to borrow money online than medical loans for bad credit. One of the best alternatives to pay for medical services is a credit union loan, which is considered less risky, charges less interest than personal loans, and requires a lower credit score. However, to use this option, you must be a member of this financial institution.
Use a Credit Card
While borrowing money through a medical loan may often be costly for bad credit borrowers, you can borrow funds through your credit card. Credit cards have variable but lower APRs than medical loans for bad credit, making them cheaper but less predictable options.
Furthermore, when using a credit card, it is essential to pay attention to your credit utilization ratio, the amount of revolving credit you use, to your credit limit.
Try Medical Credit Cards
A medical credit card is an excellent way to pay for your medical procedures without going through a hard credit check. They allow you to pay for your dental and other medical costs, offering interest-free periods, low monthly payments, and extended repayment periods.
Bottom Line
If you need to pay for your medical expenses urgently but can’t borrow money from a bank or a credit union, a medical loan for bad credit may be an excellent solution. While most personal loans require a good credit score, medical loans for bad credit can cover your unforeseen costs. Compare different online lenders to find the best medical loans for your need.
Beth is Cloudmineinc’s senior health editor and a certified personal trainer. She has over 10 years experience as a science journalist and is the author of two books. She deadlifts over 315 lbs.