Learn about and compare a range of medical loans.
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Medical expenses can put a big strain on your finances. Some procedures can set you back tens of thousands of dollars, not to mention the cost of staying in the hospital and taking time off work.
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Compare medical loans
What's in this guide?
- Compare medical loans
- What is a medical loan?
- How does medical finance work?
- What can a medical loan cover?
- What types of personal loans can cover medical expenses?
- How should I compare my medical loan options?
- Treatments covered by medical loans
- Information regarding COVID-19
- How can I get a medical loan with bad credit?
- Can I get a medical loan if I'm self-employed?
- What to weigh up: The pros and cons of a medical loan
- Should I take the finance offered by my clinic?
- Interest-free medical loans in Australia
- How do I apply for a medical loan?
What is a medical loan?
A medical loan can cover the costs of both elective and necessary medical treatments and procedures. Covering medical costs can be expensive, and even with private health insurance, you may have to pay an excess, or worse, your procedure might not be covered at all. If you don’t have the money, you can take out one of these loans to cover your medical costs.
As with a regular personal loan, a medical loan from a lender such as ACA Loans or MacCredit may be offered with either a fixed or variable interest rate as well as flexible repayment options.
How does medical finance work?
Medical finance works in the same way as any other form of personal finance. Borrowers apply for a loan and, if approved, use the allocated funds to pay for medical expenses, as well as living costs that you might incur while taking time off of work. Like any other form of personal loan, you get the money upfront and pay it back over time, along with any subsequent interest payments and fees.
What can a medical loan cover?
You can use a medical loan to cover any of the expenses associated with your medical treatment, such as:
- Medical or cosmetic surgeries. This includes any optional or elective surgeries, as well as any procedures performed at a private clinic or hospital.
- Specialist or doctor appointments. If you need to regularly visit a specialist, you can get a medical loan to cover the cost of these appointments, regardless of whether they are covered by Medicare or your insurance.
- Medical treatments or medicine. You can also use a medical loan to purchase specific drugs, treatments or medicines.
- Hospital expenses. It can be expensive to stay in hospital, but you can use a medical loan to cover any of the costs that you incur as part of your stay. This could also include any specialised procedures you receive while in hospital, such as X-rays or MRIs.
- Personal medical equipment. If you require certain medical devices or equipment to help your recovery or to treat an ongoing medical issue, you can use a loan to cover the purchase costs.
- Travel expenses. If you need to travel to get medical treatment, the cost of travel and accommodation can also be covered by a loan.
You can use most personal loans for any worthwhile purpose, and this includes any medical treatments or their related costs. If you're unsure whether a particular cost can be covered by a medical loan, it may be worth contacting the lender directly.
Bessie Hassan, money expert at Finder
"For some Aussies, a line of credit is the only way they can afford their medical expenses. While it might seem easier to just whack it on the plastic, a personal loan can sometimes be the more affordable option, depending on your circumstances."
What types of personal loans can cover medical expenses?
You can consider a few different types of financing if you require medical treatment:
- Unsecured personal loan. You can use an unsecured personal loan for any purpose, including medical expenses. You can usually borrow between $3,000 and $50,000, depending on what you can afford to repay, and interest rates vary between 8% and 20% p.a.
- Specialised medical loan. Providers such as MacCredit and ACA Loans provide financing for specific medical procedures including cosmetic surgery and dental work.
- Short term loan. If you only require a small amount and are not eligible for a standard personal loan, you can consider a short term loan. You can apply for a loan from $100 and have it repaid within a few months. Keep in mind that interest rates and fees are much higher with short term loans.
- Credit card. If you have a credit card or are eligible to apply for one, this is another financing option to consider. A credit card can be good if you don't know how much money you'll need to borrow or if you want to take advantage of interest-free periods. Make sure you check that your surgery is eligible as an interest-free purchase and that you have the means to repay the credit you use.
- Interest-free finance. Depending on your clinic, you may be able to pay for your medical expenses using an interest-free buy now pay later platform such as Zip Money.
How should I compare my medical loan options?
Medical loans offer many of the same features as other personal loans, but some of the features are also more particular:
- Fees. Most loans come with fees and medical loans are no different. Depending on the lender you go with, you may have to pay loan establishment fees or monthly fees, as well as early repayment fees or redraw fees if these features are available.
- Interest rate. Check if the loan comes with a fixed or variable rate and if the rate is competitive compared to other personal loans. You should also always consider the comparison rate of the loan since this includes any fees or charges to show the true cost of the loan.
- Repayments. Lenders may also differ in how flexible they are with their repayments. Most lenders will offer you the options of making your repayments weekly, fortnightly or monthly, but they also may allow you to make additional repayments to help save you money in the long run.
- Loan amount. As medical costs can be quite steep, medical loans are usually for higher amounts than other loans. Some medical loans have quite high minimum loan amounts. Some are around $10,000, so make sure you won’t have to borrow more than you need.
- Loan terms. As the loan amount is generally higher for medical loans, the lender may offer you a longer period to pay it back as well. Check to see if you will be able to manage the repayments with the loan term that the lender sets.
Treatments covered by medical loans
You can use a medical loan to cover pretty much any type of medical procedure. For more details on specific types of medical procedure loans, check out the below guides:
Depending on how many treatments you get, IVF can cost tens of thousands of dollars. Find out more information on IVF loans here.
Whether it's rhinoplasty, breast augmentation or reconstructive surgery, loans for cosmetic surgery are common in Australia.
Weight loss surgery
For borrowers looking to fund bariatric or other types of weight loss surgery, check out our guide.
Whether it's cosmetic or necessary, dental procedures can post a pretty penny. Find out more about loans for dentistry here.
Information regarding COVID-19
If you or someone you know has been affected by COVID-19 and you're wondering what financial help is available to you for either medical bills or other expenses, please refer to the following guides:
How can I get a medical loan with bad credit?
Having a poor credit history can negatively impact your chances of getting a loan, but it certainly doesn't make it impossible. If you have bad credit and you need to pay for medical bills that you otherwise cannot afford, there are a number of medical loans for bad credit that might be able to help:
- Short term loans. If you have a bad credit history, you can usually still qualify for a short term loan. These loans are generally available up to $2,000, though you can find lenders that offer $5,000 or even $10,000 short term loans. Please be aware, however, that these loans have high fees and interest rates attached.
- Risk-based loan. Risk-based loans are also a viable option if you have previous defaults on your credit history. However, like short term loans, you may find that you only qualify for a lower amount or a shorter term, or that you are charged more than borrowers with good credit scores would be.
- Secured loan. If you have bad credit but you offer an asset such as real estate, a vehicle or even valuable art/jewellery as security for a personal loan, you could potentially lower your rate and increase your chances of being approved.
- Get a guarantor. If you have a friend or family member who is willing to be a guarantor for you, a guarantor personal loan could be an option. If you default on your loan repayments, a guarantor becomes responsible for the loan, meaning that less risk is posed to the lender.
Can I get a medical loan if I'm self-employed?
It is still entirely possible to get a medical loan if you're self-employed. However, providers may look at your finances more closely than if you were employed by a company. This may mean that your application takes slightly longer than average.
Some of the additional documentation that you may be required to provide if you are self-employed can include:
- Company-specific information. If you own your own business, be prepared to provide information such as your company's ABN, address, etc.
- Tax returns. Be prepared to show the last two years of your full personal and/or company tax returns. These will help prove any income you declare on your application.
- Financial statements. These may include any profit/loss statements to also support the income that you declare.
- Proof of rental income. If you have any income from rental properties, you can declare this with real estate statements or copies of your executed lease agreements.
- Notice of Assessment. Make sure you have on hand your latest Notice of Assessment (NOA). Depending on the lender, you may need to provide your NOAs from the last two years.
- Recent bank statements. This includes statements showing your savings and business transactions. It may also include statements showing any other outstanding loans or credit cards you have with other lenders.
What to weigh up: The pros and cons of a medical loan
- Money when you need treatment. The ability to pay for treatment when you need it is an obvious pro to getting a medical loan.
- Money for the treatment you need. With the confidence of a loan, you can pay for the exact care you want, that you may not have been able to afford otherwise.
- Funds for your recovery. If you are forced to take unpaid leave for your recovery period, a loan will cover you for the essentials while you heal.
- Slow loan approval process. If you need an urgent procedure, the loan process may not be finished in time for when you require the funds. This could force you to put funds onto a more expensive credit card, rather than apply for a loan.
- High interest/fees. Depending on the form of finance that you opt for and your credit rating, you may find yourself paying more than you bargained for.
Should I take the finance offered by my clinic?
Whether or not you opt for in-house financing from your clinic will depend on the type of finance that your clinic offers. Many clinics will offer an interest-free period on their treatment loans, usually somewhere between 6 and 12 months. After this initial period, however, high interest is usually charged.
If you want longer to repay, or if you want the confidence that your medical repayments will not dramatically increase after the introductory period, a personal loan might be a better option for paying for your treatment.
Interest-free medical loans in Australia
If you're looking for an option that doesn't break the bank, interest-free finance could help. There are two main forms of interest-free medical finance:
Buy now pay later platforms
Many clinics now accept payments from interest-free finance providers, such as a MediPlan from Zip Money. These providers could give you up to 24 months to pay off your medical bills, interest-free.
Providers such as Zip Money can be used to pay for treatments including medical, cosmetic, vision, dental, veterinarian and more.
Things to be aware of with buy now pay later:
- Short/medium loan terms. Providers like Zip Money give you up to two years to repay your debt, so ensure that you are able to meet the repayments within this time frame.
- Pays for treatments only. Interest-free finance providers pay for your treatment directly to the clinic, with no money paid to you. So, if you think you will require extra funds for your recovery time, you may still want to consider a loan.
- Limited clinic options. Not every clinic will accept this option.
- Fees. Fees may apply.
No interest loans scheme (NILS)
If you're a low income earner, you may be able to qualify for an interest-free loan from NILS. These loans have terms of 12-18 months and have no fees or charges.
However, NILS has strict lending criteria. Applicants must:
- Have a Health Care Card or Pension Card
- Earn less than $45,000 per year after tax ($60,000 for couples or people with dependents)
- Have lived at their current or previous address for at least three months
- Show a willingness and the capacity to repay the loan
How do I apply for a medical loan?
If you’d like to apply for a personal loan to finance your medical expenses, you can compare your options using the comparison table below. If you find a suitable loan, you can then click the "Go to site" button to be taken to the lender's website to start your loan application. To apply, you’ll need to meet the following criteria:
- Be over the age of 18
- Be an Australian citizen or permanent resident
- Be employed or receiving regular payments into your bank account
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