Medical costs can add up quickly. The good news is you can use personal loans to pay them off.
Here’s a closer look at personal loans for medical expenses, including the pros and cons and how you can qualify.
Personal loans are typically unsecured loans — meaning they don’t require collateral — that can be used for a variety of purposes. You can use personal loans to help you cover medical expenses like surgeries, prescriptions, fertility treatments, and elective procedures.
A number of financial institutions, like banks, credit unions, and online lenders offer personal loans that can be used for medical treatments. To apply for a personal loan, follow these five steps:
- Compare lenders. Shop around and compare several lenders that offer personal loans for medical expenses. Compare interest rates, terms, fees, and eligibility requirements. Most lenders will let you prequalify and check your loan offer without any impact to your credit.
- Choose a loan. After comparing lenders, pick the loan that meets your needs. It should be affordable yet allow you to meet your goals. Avoid any loan that you know you won’t be able to pay back.
- Gather the necessary documents. Most lenders will ask you to submit various documents when you apply for a personal loan. These might include a government-issued ID, like your driver’s license or passport, as well as pay stubs and tax returns. Have these documents ready when you apply.
- Complete the application. Fill out the application online or in person. Be prepared to submit the required documents. Double-check your application to avoid errors or inaccuracies that may delay approval and funding.
- Get your loan funds. If the lender approves your application, you’ll sign your loan agreement. The lender may disburse your money as soon as the same or next business day. You can usually expect the funds via direct deposit, check, or prepaid card.
Related: Learn more about getting a personal loan on Credible.com
Before you take out a personal loan to pay for medical debt, consider these benefits and drawbacks.
You have many options for medical loan financing, including banks, credit unions, and online lenders. As you do your research, you’ll find that some lenders specialize in medical loans. If you have good to excellent credit, you may qualify for lower rates.
But many lenders also work with borrowers with fair or bad credit. Keep in mind that if you don’t have the best credit, you’ll likely have to settle for a higher interest rate that can increase your overall cost of borrowing.
While each lender has its own unique criteria for medical loans, most look at the following:
Medical loans are typically unsecured. This means that you won’t lose your house, car, or any other asset if you can’t repay your loan.
However, you may be able to find secured medical loans that are easier to qualify for — just keep the risk level in mind.
Related: Learn more about getting a personal loan on Credible.com