Medical Debt: How Medical Loans Can Help
Written by: Rachael P.
Published on:
Updated on:
Medical debt is one of the biggest forms of debt people experience in the United States. Thankfully, there are loans available to help those who need treatment acquire financing for medical treatment or pay off debt caused by medical treatment.
According to the Survey of Income and Program Participation, there are solutions for you if you find that you are part of the 23 million people who owe significant amounts of medical debt.
Read on for more information on how medical loans can assist you with your medical debt.
What Is a Medical Loan?
An installment loan is taken out for financing or paying off medical treatment like elective surgeries, emergency procedures, IVF, or other medical procedures.
Medical loans are often unsecured, so you won’t have to worry about risking your home, car, or other necessary collateral in the name of your health. These types of loans are best for those with good credit scores since being unable to repay the loan can hurt you.
If you need help with a medical loan and find that you cannot get an unsecured installment loan, secured medical loans are also available. This means that you can offer collateral in exchange for the loan. But, unfortunately, this means you can lose it if you ever find that you cannot pay back the loan.
How Do Medical Loans Work?
These loans can be acquired by applying online or at a financial institution. You may find that some lenders will allow you to get prequalified, enabling you to see available rates and terms based on the financial information you provide.
You will need to provide salary verification, a credit check, and other required information.
Once approved and having acquired funds, you’ll have to make fixed monthly payments until the loan is paid back in full.
Who Offers Medical Loans?
Most online lenders, credit unions, and banks offer loans used to cover medical expenses. Additionally, you may find that some individual healthcare providers may offer loans used to cover medical costs.
Simple Fast Loans offers multiple options that can be used as medical loans like installment loans.
The Advantages of Medical Loans
Unfortunately, no one can completely prevent illnesses, accidents, or other emergencies. As a result, many Americans have accumulated significant medical debt from which they are unable to recover.
So, what are the benefits of getting a medical loan?
Fast Funding
Often, patients can be turned away if they cannot acquire funds for payment. However, if you require critical medical care, you likely need to have it done soon. Depending on where it is acquired, an installment loan can be disbursed to you in a matter of days.
Help Avoid Default
Although you always hear that taking on new debt to settle old debt is less than ideal, it can sometimes be better than allowing old debt to become delinquent.
Although medical providers take longer than some to send your debt off to collections, it can tank your credit score in one swift motion.
If you can take a large, looming debt load and switch it for one you’ll be able to pay off monthly in smaller amounts you can plan for, you should take it.
Flexible Use
Whether you are trying to pay off medical debt, paying for treatments and procedures not covered by insurance, or even travel expenses acquired during treatment, you’ll be able to use your installment loan.
You Won’t Have Delay Treatment
Reports indicate that many people with large amounts of medical debt will try to put off seeking treatment for health issues for as long as they can to get their debt paid off.
Choosing between medically necessary treatments and paying off your debt shouldn’t be hard. Medical loans can make medical debt easier to take on.
Variety of Loan Terms
Depending on where you go for your installment loan, you’ll have various repayment term options. Often, these can range from 36 to 60 months and can be selected depending on what best suits your needs. With an installment loan, you’ll have the same payment each month at the same time, so you’ll be able to budget accordingly.
| Advantage | Details |
|---|---|
| Fast Funding | Installment loans can often be disbursed within a few days, crucial when medical treatment is time-sensitive and cannot be delayed. |
| Helps Avoid Default | Using a loan to cover medical debt can prevent it from going to collections, which would otherwise harm your credit score significantly. |
| Flexible Use | Funds can be used for a wide range of medical-related expenses—uncovered treatments, ongoing care, and even travel costs related to treatment. |
| No Treatment Delays | A medical loan can help avoid postponing necessary care, which is a common issue for those burdened by existing medical debt. |
| Variety of Loan Terms | Borrowers can choose from multiple repayment periods (often 36 to 60 months) to find a monthly payment amount that fits their budget. |
Medical Debt: How Does It Happen?
Unfortunately, even those with great insurance plans often have to cough up thousands of dollars for unexpected medical bills. Often, these bills can be challenging for people to pay back on top of the other expenses they may have.
The Kaiser Family Foundation reports that a survey from March 2019 found that 1 in 4 adults said that they have problems paying back medical bills.
According to an analysis by KFF, published on their Health System Tracker with the title "The Burden of Medical Debt in the United States," approximately 23 million people, or 1 in 10 adults, are burdened with medical debt.
Among them, 11 million owe more than $2,000, and 3 million owe over $10,000. Unfortunately, this debt trap leads to many individuals postponing medical treatment due to financial constraints, which may exacerbate their health conditions.
Consequently, it becomes a vicious cycle that they cannot break free from. This leads to more and more individuals delaying medical treatment due to finances, sometimes leading them to become even worse off.
As these numbers grow at record rates, many have found that they have an extreme amount of debt they cannot pay off or cannot pay for the expenses upfront to stay ahead.
Thankfully, loans exist to help people with this.
Other Types of Loans
Other loans are available to those who need them, including installment loans. Simple Fast Loans offers installment loans for those looking to pay down medical debt. This loan type is designed for fast approval and same-day funding.
What Is an Installment Loan?
An installment loan is an agreement involving a loan that will be repaid over time. A set number of payments are scheduled for a day of the month.
Simple Fast Loans offers outstanding installment loans that will allow you to quickly avoid the often-complicated application process and get the money you need.
Advantages of Installment Loans
Installment loans may be one of the best ways to pay off your medical debt. Simple Fast Loans makes it easy to do so, offering loan amounts of $200-$3,000 with flexible loan repayment periods.
Additionally, Simple Fast Loans offers a fast, easy application process and the ability to make your loan decision instantly. Your loan amount will be calculated by your income and ability to repay the loan. Also, the maximum amount of money you can get depends on your state.
What Is Needed To Apply for an Installment Loan?
Getting an online installment loan through Simple Fast Loans is a quick and easy process. Thankfully, you only need a few simple things to apply online:
- Valid social security number
- Phone number a representative can contact you at
- A valid government-issued photo ID
- An active checking account where your Simple Fast Loans installment loan can be deposited.
How To Compare Medical Loan Lenders?
As there are many lenders, shopping around for the right medical loan to fit your specific situation is essential. Here are a couple of things to keep in mind:
Repayment Terms
Most lenders offer one to seven years of repayment, depending on the lender. When choosing a repayment term, it’s usually best to choose the shortest term you can afford. However, Simple Fast Loans offers flexible repayment terms to determine what works best for you.
Loan Amounts
The loan amount will vary depending on the lender. If you are trying to pay off massive medical debt, you may want to shop for the best lender that will provide you with the loan amount required.
Fees
Some lenders will charge you fees for anything, including getting the loan or paying it off early. Check with the lender you’re looking at to see if they charge any fees.
Simple Fast Loans does not charge you for paying off your loan early.
What Not To Do When Faced with Medical Debt
If you’re faced with an ever-growing mountain of medical debt that you don’t think you’ll ever be able to climb over, know you’re not alone. So many people are faced with this reality every day.
Here are two things you should never do when faced with medical debt:
Allow the Debt To Go to Collections
If you’ve been ignoring the medical bills coming to your door, you may receive a notice from the provider informing you that your medical bill is overdue. Unfortunately, you may find that you get a few of these. At this point, you’re in danger of your debt becoming delinquent.
If this happens, a provider will either have their internal collection department call you to try to acquire their money, or they’ll sell your debt to a third-party collection agency that will start trying to get in contact with you.
At this point, it may be easy to ignore it, hoping it’ll just go away. But, unfortunately, it won’t. Once your account goes to collections, you’ll likely see a drop in your credit score, and the mark will stay there for seven years.
Use an Existing Credit Card To Pay Off Debt
Using a credit card to pay off your debt may sound promising, but it can lead you into a deeper and deeper hole. It can hurt you more financially than using a loan to pay off your medical debt.
Unfortunately, credit cards often have higher rates than loans and can take a long time to pay off completely, hurting your credit more than a loan can. This is because you should be paying off your credit card each month, while with a loan, you’ll have a fixed repayment amount each month.
Using a credit card to pay off your debt can become a costly way to reduce your debt. That being said, some credit options are better suited for medical use.
Other Ways To Pay Off Medical Expenses
It’s easy to panic over medical bills when facing the mountain of debt you may have. You may find that you must take out a loan to pay off current medical debt but want to find ways to prevent medical debt buildup in the future.
Alternatively, you may find that you want to avoid taking out a loan altogether and are looking for other options available to you.
Here are some options:
Emergency Medical Savings Fund
Even if you must take out a loan to pay off your medical debt, starting a medical savings fund is critical to staying on top of future medical issues.
This could be a separate savings account or a Health Reimbursement Arrangement (HRA) offered by your employer. You can also see if you qualify for a Health Savings Account (HSA), where funds can be withdrawn to cover qualifying medical expenses and are not subject to federal income tax.
A medical savings account is essential for avoiding future debt accumulation.
Negotiate with Providers
Some providers are happy to negotiate with patients and patient advocates, especially when it comes to charging off a debt completely. Here are a few things you should consider when negotiating with your healthcare providers:
- Payment plans. One of the most harmless questions you can ask your provider is if they offer a payment plan. You never know; they could accept payment on a schedule that works better with your budget.
- Income-based hardship or financial assistance. Check to see if your provider offers any income-based financial aid, as it will be easier on your wallet than a payment plan.
- Check for billing errors. Flag potential billing errors you find. For example, if you find that your provider’s fees are wildly more than other providers around you, they may offer to reduce your bill.
Sometimes there is no way to truly plan for a medical emergency, as accidents and major illnesses can happen anytime. No one should ever have to consider dealing with a severe medical condition rather than add to the mountain of debt they already have.
