If your towers of medical bills are growing taller by the day, you might be seriously stressed wondering how you’ll pay them off. If you try to pay with a credit card, the interest could send you into a debt tailspin. One solution? Taking out a personal loan.
A personal loan can help you pay off your medical bills without accruing insane interest. Using a personal loan combined with a debt repayment strategy like the debt snowball method can make your debt shake in its boots.
How do personal loans work?
Personal loans are a type of secured loan that don’t rely on you putting down any collateral, such as your home. You can use personal loans for a variety of reasons including refinancing credit card debt and paying for home improvements. The better your credit score, the more favorable the loan terms you’ll likely be offered.
Can I use a personal loan for medical expenses?
Yes, you can take out a personal loan for medical expenses to cover everything from your upfront medical costs to your living expenses while you recover.
Pros of medical loans
Advantages of taking out a medical loan include:
- You can get the funds you need for medical expenses.
- You might be able to receive money the same day you apply.
- You’ll be able to pay it back with both fixed monthly payments and a fixed interest rate.
Cons of medical loans
Disadvantages of taking out a medical loan include:
- You’ll have to pay interest.
- It can be difficult to get approved if you have a low credit score. And if you are approved with a poor score, your interest rate could be high.
- You might have to pay a loan origination fee. And if you pay off the loan early, you could face a prepayment penalty.
Other medical bill payment options
Personal loan not for you? Here are some other options you can consider:
- Negotiate bills: Once you receive your medical bill, you can try to negotiate your balance with the billing department. You may want to consider this if you don’t have health insurance or saw a provider who’s out of network.
- Set up a payment plan: If you can’t negotiate, you might be able to set up a payment plan for your bill. Some medical providers have their own payment plans that you can use instead of a personal loan.
- Look for errors: Billing offices make mistakes, so it’s worth taking a close look at your bills to see if any charges were in error.
4 steps to apply for a personal loan for medical bills
If using a personal loan for medical bills sounds like a good fit, here’s how you can apply:
- Decide how much you need: The first step is figuring out the amount you need and can afford with your current budget.
- Check your credit score: The interest rate you’re offered is dependent on your credit score. Take time to check your score since this will help you understand which loans and rates you’ll qualify for.
- Do your due diligence: Look into different lenders and loan options from banks, online lenders, and even credit unions. Get multiple quotes and see which ones have the best terms and rates.
- Pick a lender and submit your application: Once you’ve selected the best loan option, it’s time to send in an application. Try to have all the documents you need for applying ready to save yourself time, such as proof of income.
If your costs for recent medical treatments were a rude awakening, don’t despair. A personal loan might be a good way for you to pay them off without tanking your finances. Keep calm and carry on with your personal loan research. You’ll be back on your feet in no time.