In a NutshellIf you have an upcoming medical procedure and can’t afford to pay the cost out of pocket, medical loans may be able to help cover the bill. But before taking out a loan, consider the benefits and drawbacks and whether another financing option may make more sense. We’ve rounded up our top picks to consider.
Medical debt is a complicated issue — and an emotional one.
The medical billing system is complex. It’s not always easy to figure out how much you’ll need to pay to get the care you need. Whether you need treatment for a medical emergency or an elective surgery, paying for an expensive procedure can be tough.
Taking out a loan or opening a credit card for medical expenses may seem like a tempting option, especially if you’re already struggling to pay your medical costs and don’t have the health insurance you need to cover them.
We’ve rounded up our top picks for medical lenders, sorting by what makes them stand out, and we’ve also included some alternatives you may want to weigh.
- Best if you need a co-signer: United Medical Credit
- Best for multiple treatments: CareCredit
- Best for fast funding: LightStream
- Best for large loan amounts: SoFi
- What you should know about medical loans
- Alternatives to medical loans
- How we picked these loans
Best if you need a co-signer: United Credit
Why United Credit stands out: If you don’t have great credit, United Credit may allow you to add a co-signer to your loan application. Getting someone with good credit on board with co-signing your loan may increase the likelihood of approval or help you qualify for a lower interest rate. United Credit isn’t a direct lender. Instead, when you submit your loan application, it shares your information with its partner healthcare lenders and attempts to connect you with a loan based on your credit profile.
- Loan amounts — Through its lending partners, United Credit offers loans ranging from $500 to $25,000. Loans typically have repayment terms of one to five years.
- Fees — United Credit notes that some loans charge double-digit interest rates and may have origination fees.
- Network requirements — Most of United Credit’s financing programs require you to work with a healthcare provider within its network. If your doctor isn’t within its network, they may have to enroll with United Credit before your application can be processed.
Read our full review of United Credit for more information.
Best for multiple treatments: CareCredit
Why CareCredit stands out: Unlike the other financing options on this list, CareCredit isn’t a loan — it’s a credit card designed exclusively for health-related expenses. If you need multiple treatments or want continued access to financing in case of emergencies, CareCredit is a revolving credit account that you can repeatedly borrow against when needed.
- Introductory financing — CareCredit offers no-interest promotional periods. If you pay off the promotional purchase amount within the designated period — typically six, 12, 18 or 24 months — no interest will be charged from the purchase date. But if you don’t pay off the full balance within the specified promotional period, you’ll face interest charges on the purchase amount from the original purchase date.
- Repayment terms — Depending on your purchase amount, repayment terms range from six to 60 months.
- Account uses — CareCredit can be used to pay for a range of medical services for you, your loved ones and even your pets. CareCredit is accepted by more than 260,000 healthcare providers and veterinarians nationwide.
- APR — While CareCredit often has promotional financing options, its regular annual percentage rate can be quite high if you don’t pay off the balance within the designated promotional period — the standard cardholder APR is well into the double digits.
- Co-signers — CareCredit allows applicants to apply with a co-signer. If approved, the co-signer will also receive a CareCredit card and be jointly responsible for charges to the account.
Read our full review of CareCredit for more information.
Best for fast funding: LightStream
Why LightStream stands out: Unlike other companies on this list so far, LightStream offers personal loans that can be used for many purposes, including medical bills. One major benefit: You may be able to receive your money as soon as the same day you apply with LightStream. (Keep in mind the exact timing usually depends on your bank.)
LightStream offers personal loans between $5,000 and $100,000.
- Loan experience guarantee — LightStream offers a “loan experience guarantee.” If you aren’t satisfied with your experience, contact the company, and LightStream will send you a questionnaire requesting feedback. Complete the questionnaire within 30 days of receiving your loan, and LightStream will send you $100 as soon as the company receives it.
- Rate beat program — When you take out a loan from LightStream, you can feel fairly confident that the rate you receive is competitive. With LightStream’s “rate beat” program, the company will give you a rate that’s 0.1 percentage points lower than the rate offered by a competing lender if you meet certain requirements, including providing proof that you were approved for a lower rate.
- Fees — LightStream loans don’t have origination fees, late fees or prepayment penalties.
Read reviews of LightStream personal loans for more information.
Best for large loan amounts: SoFi
Why SoFi stands out: Like LightStream, SoFi offers personal loans that can be used for a number of financial needs. SoFi offers personal loans between $5,000 and $100,000 to pay for medical or dental procedures, and you won’t have to provide personal health information or submit notes from a doctor’s appointment.
Loans have repayment terms of two to seven years.
- Fees — SoFi loans don’t charge late fees or prepayment penalties.
- Not in all states — SoFi personal loans are available in most states, but some are ineligible.
Read reviews of SoFi personal loans for more information.
What you should know about medical loans
A medical loan is often another name for a personal loan that’s used to pay for medical expenses.
Personal loans can be used for a range of medical treatments, including elective procedures, fertility treatments, prescriptions, surgeries and more. A number of lenders, including certain banks, credit unions and online lenders, offer personal loans that can be used for medical treatment.
Medical loans may be unsecured personal loans, meaning they don’t require any collateral. Since lenders are trying to judge your ability to repay the loan, applications for these types of personal loans will primarily focus on factors such as your credit history and income.
You could also consider applying for a secured personal loan to help pay for medical expenses. Secured personal loans require you to put up collateral to secure the loan, but you may be able to get more-competitive rates.
The amount you may be approved to borrow and the terms of the loan will depend on a variety of factors, including your credit history.
Pros of medical loans
There are a few benefits of using a personal loan to pay for medical expenses. You may be able to get access to funds quickly — and if you’ve had a medical emergency, this may be the most important factor for you. If you’re approved, some lenders will give you the funds within a few business days.
Personal loans may also be cheaper than using a traditional credit card to pay for your medical debt. The average 24-month personal loan has an APR significantly lower than the average APR on credit cards.
Cons of medical loans
Medical loans can be an expensive financing option. While some borrowers can qualify for low-interest personal loans, applicants who don’t have strong credit histories will probably see much higher interest rates. Depending on the terms you qualify for, you could end up paying a lot in interest over a number of years.
A medical loan doesn’t decrease the total cost of what you’re paying. If you’re struggling to pay medical bills, explore options that could actually reduce the amount you’re required to pay.
Alternatives to medical loans
Taking out a personal loan to pay for your medical bills isn’t always the best option. Instead, examine medical financing alternatives before you borrow money.
Explore financial assistance
If you’re struggling to make ends meet, you may qualify for free or reduced-cost care.
Hospitals often have financial-assistance programs to help you pay for the care that you need. The criteria for financial assistance vary, but these programs might consider your income, assets and whether the care you receive is a medical necessity.
You may also be able to work out a payment plan with the hospital if you need extra time to pay the debt.
Look for information about your hospital’s financial-assistance program on its website or through its customer service department.
Ask for discounts
Some hospitals may provide discounts if you’re uninsured, even if you don’t qualify for free or reduced-cost care.
Every hospital has its own policy, but if you’re uninsured, don’t have coverage for the medical procedure you need, or need to pay out of pocket for another reason, ask about getting a discount.
Negotiate a lower payment
If you don’t qualify for financial assistance but still need to lower your bill, consider negotiating with your doctor or hospital. You may be able to negotiate an out-of-network bill down to a more-manageable cost.
Dispute billing inaccuracies
Before you pay your medical bill, take some time to double check your invoice to make sure everything is correct.
If you find any incorrect information, call your healthcare provider or insurer to dispute the errors.
How we picked these loans
To select the best medical loans of 2021, we evaluated about a dozen different lenders specializing in healthcare financing. We evaluated each lender based on their repayment terms, available loan amounts, fees and APRs. We also looked at lenders’ typical time to fund loans and whether they allowed applicants to add co-signers to their applications.