Medical problems can arise at the worst possible times – like in between paychecks, or when there’s just no money. In some cases, the bills can be so high that the amount you saved aside for emergency isn’t enough to cover the bills. In such a case, taking out a medical loan can be a viable option to weather the storm. But is it a wise idea to get a medical loan?
Other than job loss and divorce, emergency medical expenses are amongst the main causes of debts today. In fact, the three bundled together are termed as the unholy trinity of financial hardship. But this doesn’t come as a shocker, considering the fact that medical costs are soaring daily. If you are wondering about whether or not it is a good idea to take out a loan to cover your medical expenses, then here are some reasons to help you make an informed decision.
Understanding medical loan
A medical loan is the money you borrow to pay for medical costs. The loan can be used for a range of reasons, including fertility treatments, elective procedures, surgeries, prescriptions, and more. It may also be used for consolidating medical debt. Different lenders including credit unions, certain banks, and credit unions provide loans that can be used for medical reasons. Online lending, however, is usually the most convenient as it provides 24/7 access. Besides, it allows you to compare a range of options to settle for the best possible option in the market, according to your needs and preferences.
Pros of taking a medical loan
Medical expenses are the leading reason people file for bankruptcy today. Taking out a medical loan can be a great way to handle your costs in installments. It helps you to offset the cost and avoid the stress that comes with upfront payment. With a medical loan:
- You can get funds for medical care faster than you would if you waited for insurance to determine whether the problem is covered or not. When time is of the essence – like during a medical emergency, a medical loan can be a lifesaver because it might only take a couple of business days to materialize.
- You can get money without tying down your assets as collateral
- You may get a better deal than other financing option that you would obtain from a healthcare facility
- Get an extra amount that you can diverge for other medical-related expenses like buying medical devices
Cons of taking a medical loan
Medical loans are great, but like any other loans; they also come with their own share of downsides. For instance, if you have a poor credit history, you may have to deal with higher interest rates, which translates to more money out of your pocket. Additionally, it’s in your best interest to find the best lender in the market. Otherwise, you may end up with a raw deal.
So, should take out a medical loan?
Health is priceless, and a medical emergency can be very costly. As an average person, abrupt illness can put your family finances in ICU even after you or your loved one recovers. A medical loan can be a great way to manage such situations. The only catch is to ensure you take only what you need, and that you work with a reliable lender.