Medical emergencies bring on the most stressful situation because not only is health on the line but also dealing with how to pay for the medical bills. Like most people, if you don’t have enough savings or a high enough credit card limit to pay for an abrupt medical treatment or surgery, consider the different options of loans specific to paying for the medical bills.
Loan it directly from the healthcare provider.
Many healthcare facilities will have a financial assistance department if you are having trouble coming up with the bill to pay for the service. Ask to speak to a social service staff or inquire directly with the doctor if you can make payment installments. This can be beneficial because the medical facility might not charge any interest or fees on top of the bill amount.
But remember, there are some negatives with this option. Many providers don’t allow the loan to be more than a few months outstanding before sending the debt to a collection agency, which would be less flexible on the payments. Once it is considered bad debt, medical debt impacts your credit more than standard debt like personal loans, and it stays on your record for up to seven years, even after you’ve paid off the medical debt.
Take a personal loan to pay for the surgery or treatment.
A personal loan can be another option to pay for medical bills, especially if taking it from lenders who specialize in unsecured medical loans.
Medical lenders give instant decision and fund quickly. To get approval, you may be asked to verify income and credit. Most of these loans are varied in fixed rate with an installment payment plan to repay back in full. It is important to compare with several medical lenders.You can still get approved even if you have low credit and the loan amounts can range from less than $5,000 to over $100,000.
Some companies who have a business relationship with the medical provider who will service you offer no interest financing. However, many times these companies include the financing fee within the medical bill itself, and if you miss a payment, the default rate can be as steep as a payday loan.
Pull a home equity line or second mortgage to pay for the medical bill.
If you are a property owner, and have an abrupt medical emergency you have to care for, paying for it with a loan on your house cold be the lowest cost loan because it is secured by your property.
A second mortgage or credit line normally is about 4-6 percent interest percentage points higher than the federal funds rate. A second mortgage loan is better if you are planning to pay for all the medical bills upfront, because a second mortgage can be a fixed rate. But if your planning to pay your medical bills over time, a line of credit might be better because you only pay interest on the balance you owe. It is important to note though, as opposed to a second mortgage, a home equity line of credit is always a variable rate, so it can go up depending on the market.
If you do not own real estate but have a car, you can take a secured loan on your vehicle. These loans have interest rates that are higher than property loans but are typically much faster to fund and are more flexible when it comes to loan approval.
Decide what is the best route to take within these options, speak to several reps within each option, and take action on the best option. Getting approved is the next step.
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