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Couple discussing how they can Cover Unexpected Medical Bills

How To: Use an Installment Loan to Cover Unexpected Medical Bills

The United States is one of the most expensive countries in the world for medical treatment. A treatment plan here can be 20-30x the cost anywhere in the world, even if you are insured. It probably comes as no surprise that this sends a lot of people deep into medical debt.

While it is always advised that you have savings available to help cover unexpected medical bills, it isn't always possible. We can't predict when we get sick. We can't predict when we get injured. Tomorrow, you could break your leg and face a bill of $35,000+, even if you are insured.

If you are faced with unexpected medical expenses, then you may wish to consider installment loans. Many others have used this type of borrowing to cover unexpected expenses in their life. Before you learn about how installment loans can assist, it may be worth knowing what will happen if you fail to cover your medical bills. 

How Expensive Can Medical Bills Be?

Each year, Americans spend over $4-trillion on medical bills. The average cost of a stay in the hospital is $5,220 per day. This is before you even factor in the cost of expensive surgery or even your medication. Common injuries can lead to prices such as:

  • Broken bones that require surgery can cost anywhere from $17,000 to $35,000.
  • Heart bypass: $125,000
  • Hip replacement: $40,000
  • Angioplasty: $28,000
  • Cancer treatment: average of $150,000

The costs of these can be brought down ever so slightly if you are insured, but unless you have a fantastic health insurance policy, you are going to be left paying for certain things out of pocket. This means that you are going to be dealing with medical expenses. Serious medical expenses. Even the most minor of injuries can have a huge impact on your financial life going forward. 

What Can Happen If You Do Not Pay Off Medical Bills

If you avoid paying immediate medical bills, then you may struggle to be able to afford needed medication. This can make your treatment much more difficult. In some cases, you may even end up worse.

Of course, the long-term impact of not paying your medical bills will be even greater.

You Will Have An Opportunity To Pay

The medical establishment will normally give you a certain amount of time to pay your debt. They would rather that you pay them than the debt go to a debt collector.

A lot of hospitals won't even expect you to pay the full amount for your bills. Many will work with you to come up with an installment plan, and some may even negotiate a lower price with you. After all, they would rather get something than nothing.

Of course, if you don't communicate with them, or you stretch the repayment on for too long, then they will have no choice but to use other methods to receive the cash that they are rightfully owed. This means that your debt is going to be handed over to debt collectors.

The Debt Will Eventually Be Handed Over To Debt Collectors 

Debt collectors are not pleasant to deal with. After all, their main goal is to receive the money that the companies that they represent are owed. If they are not able to recover this cash, then they don't pay.

Debt collectors will normally start by sending you a few letters to let you know that the debt has been handed off to them. They will ask you to get in touch with them, and you may even be given more options to repay the debt. Again, these people are concerned with being paid, not how you do it.

Eventually, you are going to start to feel the full force of not paying the medical bills, though.

For starters, you will start to see hits on your credit score. This can make it exceedingly tough to borrow in the future. It may make it difficult for you to get credit cards, bank accounts, and even some types of insurance. In rare cases, hits to your credit score may have an impact on whether you can get certain jobs.

If you let the problem progress, then the debt collectors will be able to take legal action against you. This means that they could seize your property to pay for the debt, they could garnish your salary, and they may even be able to force you through the bankruptcy process. Yes. Bankruptcy can discharge your medical debts but being forced through a bankruptcy is going to have a lasting impact on your financial life. It really is not something that you want to deal with.

Thankfully, it takes a lot of avoiding paying the medical bills to get you to the point where you are staring bankruptcy in the face. You will have plenty of options to cover your debt, and installment loans may provide you with the cash that you need to prevent your financial life from spiraling out of control. 

How You Can Use Installment Loans to Cover Medical Bills

While it is always suggested that you pay out of your pocket for medical bills wherever possible, not everybody has emergency funds or thousands of dollars in savings. This may mean that they need to turn to other options to cover their medical bills. One of the most popular would be an installment loan.

What Are Installment Loans?

Installment loans are very similar to a typical bank loan. When you take out an installment loan, you will be borrowing a fixed sum of cash. The amount that you can borrow will be dependent on your personal circumstances. The cash will then be paid back in fixed installments.

An installment loan can assist in covering short-term medical expenses. This means being able to cover immediate medical needs, or perhaps to help fund a trip to a specialist for diagnosis. 

A lot of people see installment loans as an option to cover unexpected medical bills as they allow them to spread the cost of their bills over several months. It ensures that unexpected bills won't take up a huge chunk of your savings, or perhaps a massive chunk of your salary. 

How Do Installment Loans Work?

How an installment loan works for unexpected medical bills will be dependent on the lender. Your personal circumstances will be analyzed to determine how much cash is available.

Before signing the loan agreement, you will be informed of the repayment terms. This means the amount of cash that needs to be paid back each month.

The cash will then be sent to your bank account. This will allow you to cover your unexpected medical expenses right away. This means that you will be able to get your hands on things such as needed medication within just a few, short hours.

How An Installment Loan Can Be Used 

Installment loans tend to be used by those that need to cover emergency expenses e.g., unexpected medical bills. This may include the following.

Pharmaceutical Expenses

One of the main reasons why people opt for an installment loan is to cover the cost of their medication. As you may well know, the cost of medication is expensive at the best of times. If you haven't budgeted for it, then it can be financially draining. Each year, the average American spends over $1,000 on medication. Suffering from a serious condition or infection? You will likely be spending a lot more than that.

An installment loan can allow you to get your hands on medication that you may not have otherwise been able to afford. This can help to speed up your recovery, and it will also help to ensure that you will always have the best medication available to you.

Small Medical Expenses 

Having a check-up with your doctor, or a trip to the emergency room can be fairly expensive. This may also not be the type of thing that you want to charge to your insurance. This is because the cost is going to be relatively small. In this case, a lot of people will consider an installment loan as a way to spread the cost out a little bit.

An installment loan may also help to cover any premium/excess on your insurance i.e. the amount that you need to fund of your own treatment before the insurance plan kicks in. A lot of the cheaper insurance plans will have this feature on. Until you pay it, you are effectively uninsured. 

Bookings With Specialists 

Bookings with specialists can be expensive. However, in most cases, they are going to be a vital expense. It can help you to become diagnosed a whole lot quicker. This can put you on the path to recovery faster.

Installment loans can help to cover these unexpected trips to a specialist. In the United States, the average cost of a consultation with a specialist is around $250. This may not seem like a whole lot, but chances are that you are going to need to have a lot more than one consultation.

To Prevent a Medical Debt from Being Sent To Debt Collectors 

In some cases, the debt isn't unexpected. You have been sitting on it for a while, and the hospital is threatening to send it on over to the debt collectors.

In this case, the cash that you receive from an installment loan can help prevent the medical debt from reaching this point. It may help to cover any cash that you owe the hospital in the short term. This means that you do not have to deal with the negative consequences of the medical debt being sent to debt collectors e.g. no hits to your credit score, no risk of bankruptcy, and your wages aren't going to be garnished.

Of course, make sure that you do budget yourself to ensure that you have the funds to cover the installment loan. After all, you don't want to move the problem from one place to another. You will only be making the problem worse for yourself.

Final Word

An installment loan from a lender can be a great way to cover unexpected medical bills such as trips to specialists or medicines. If you find yourself faced with unexpected medical bills that you can't cover with your personal finances, then consider an installment loan.

An installment loan can help to ensure that you get the treatment that you need now. It can help to ensure that you do not force yourself into untold amounts of medical debt. These loans can often be issued in a matter of hours. This means that the debt can be covered sooner as opposed to later. 

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