Is Using Personal Loan to Pay For Medical Debt a Good Idea?

Health care in the United States is very expensive, leaving a lot of Americans in deep medical debt. Getting sick can get you bankrupt, and ironically, health insurance doesn’t always get you the assurance of worry-free treatment.

A survey found that one in five insured working-age Americans has difficulty paying off medical bills and goes through serious financial challenges. Medical debts even lead to major changes in employment and lifestyle.

When you find yourself unable to pay off your medical bills and end up incurring debt because of your medical bills, is taking out a personal loan a good way to go?

Before you rush to the nearest bank to do that, you have to consider this: When it comes to medical bills, you can try other avenues first before deciding to finally take out a personal loan. Here are some of them:

  • Check if you were correctly billed. Before even stressing yourself out about the amount of your medical expenses, make sure to check, double check, and triple check if your bill is accurate. There are instances when there are duplicate charges or patients are charged with procedures that were not performed.
  • Negotiate with your medical provider. Talk to someone in the billing department regarding your wish to negotiate your bill. It may not always work, but when it does, it can spell a huge cut to the amount due. Just make sure that you come in ready with your game plan in negotiating. Know how much you are able to pay, whether up front or in installments.
  • Look into payment plans or financial assistance. Some medical providers offer installment plans to patients. Review the terms carefully. Some hospitals, especially nonprofit facilities, have charity programs that aid patients in covering or reducing medical bills. They look at income and savings when evaluating eligibility. You will need to apply directly with the provider or organization in order to receive financial assistance.

When you’ve looked into the options above and you still find yourself buried in medical bills, maybe it is time to consider taking out a personal loan. A personal loan is unsecured, which means that lenders do not require collateral. This also means that the underwriting process will rely heavily on your credit score and history.  Loan amounts typically start at $1000 and go up to $100,000. As for interests, you will find that they are higher compared to mortgages, but they can be much lower than credit card interest rates. One good thing about taking out a personal loan is you can get it quickly. If a lender decides that you are a creditworthy borrower, you can possibly apply for a loan in 1 minute, have an answer within the next 15, and get the money in the next few days.

One advantage of using a personal loan to pay off medical debt is that the rate, payments, and term are usually fixed. You can opt for a term that will best fit your budget. If the lender permits paying off the debt earlier than your term without any penalties, do so as this will help you save on interest.