Ultimate Guide to Medical Financing

Everything you need to know about financing your medical expenses

When you require medical help and insurance won’t cover the procedure, you need financing. Whether it’s money for weight loss surgery, dental work, LASIK, or you need medical loans for in vitro fertilization (IVF), there’s a solution to your medical financing needs.

How much do medical procedures cost?

No matter what type of health problem you have, medical procedures are expensive. For instance, if you don’t have insurance coverage, joint replacement surgery runs $16,500 to $33,000, while cataract surgery costs from $2,300 to $3,000. Gastric bypass weight loss surgery costs $2,000 to $24,000. Even routine diagnostic medical procedures, such as a colonoscopy, can average $1,000 to $3,000.

Even if you have medical insurance, there’s a very good chance you have a deductible to meet. The amount you owe will depend on the procedure and your particular policy. Rather than find yourself in trouble with medical debt, which can negatively affect your credit score, it’s best to find a financing option as soon as possible.

Consider the following ways to finance medical procedures.

Options to finance medical procedures

Medical procedures are expensive enough, so it makes sense to find the most cost-effective financing options available.

Use a credit card

How it works

One of the most straightforward and easy ways to pay for a medical procedure is with a credit card. If you have enough credit on your card, you can simply use it to pay the medical provider. Use a cash-back card, if possible, so you get money back.

Another great option is to apply for a credit card with a 0% introductory annual percentage rate (APR). If you have good credit, you can qualify for one of these cards, which enables you to pay off the balance within a six- to 18-month grace period without paying any interest.

Be certain you can pay off the balance within the allotted time frame, or else you’ll end up paying very high interest rates that will only add to your medical debt.

A good example is the Citi Double Cash card, which offers an 18-month, 0% introductory APR rate that gives you a chance to charge the medical procedure and pay it back over an extended period. Just make certain you can pay it off before the grace period ends, or you will be charged 13.49% to 23.49% APR based on your credit.

If your credit is poor, you probably won’t qualify for 0% APR. In that case, take a look at the Indigo Platinum Mastercard, designed to help borrowers rebuild their credit history. If you’re unsure of your credit score, you can check it here.

Pros: Most medical providers take credit cards. If you can qualify for a 0% introductory APR for six to 18 months, you’ll have a chance to pay off the loan without paying any interest.

Cons: Fail to pay off the loan before the 0% APR grace period ends, and you’ll end up paying a lot of interest on the remaining balance. If you don’t have good credit, you probably won’t qualify for one of these offers.

Try a medical credit card

How it works

Financing medical procedures may work well with a medical credit card. Use caution with such cards, however. Though many offer a 0% APR for six to 18 months, the payoff terms can be problematic. If you don’t pay off the entire amount borrowed before the grace period ends, you’ll still owe all of the interest on the original loan amount.

Pros: This option works well if you can get a 0% APR for six to 18 months.

Cons: To not pay high interest, you must pay the loan off before the grace period ends. If your budget is tight, this can be a risky proposition. Not all medical providers take medical credit card payments.

Unsecured personal medical loan

How it works

Also known as signature loans, unsecured loans allow you to borrow money without having to put up any collateral. Online personal medical loans are quick and easy to get when you have good credit, or you can get a personal loan from a bank or credit union. Interest rates are usually fixed, which makes budgeting easier. You usually get a payoff period of two to three years or longer. (The longer your payoff period, the more interest you’ll pay).

Lightstream is a good example of a lender that offers unsecured personal loans. To individuals with excellent credit, they give medical financing loans of $5,000 to $100,000 with fixed rates as low as 5.99% APR.

Pros: Online loans feature lower fees and more competitive rates than many bank loans. You don’t require collateral to get a personal medical loan.

Cons: You may not be able to qualify for most personal medical loans if you have bad credit. Those few lenders that do offer medical loans for bad credit charge high interest rates.

Peer-to-peer lenders

How it works

With this financing option, you connect with individual lenders in the market to fund loans. The transactions are made through an online marketplace lending platform. You’re matched up with a lender who, if you are approved, provides you with funds for your medical procedure.

Peer-to-peer loans generally range from $1,000 to $40,000. Payoff terms are usually from one to five years, depending on the amount of the loan. LendingClub is one popular peer-to-peer lender.

Pros: When this form of financing works, there are a variety of advantages, including fewer fees and easier approval than traditional bank loans. Interest rates also are usually competitive.

Cons: Borrowers with poor credit will find it difficult, if not impossible, to get a peer-to-peer lending loan. If you do manage to get one, the interest rate probably will be high.

Recommended medical loan lenders


Lending PartnerMinimum FICO scoreEstimated APR 
6605.99% - 35.89%*Apply
5809.95% - 35.99%*Apply

Secured loans

How it works

If you own a home and have equity, good options are a home equity line of credit (HELOC) or a home equity loan (second mortgage). These types of loans generally offer a low interest rate. Even better, the interest payments are tax deductible.

HELOC and home equity loans are secured, which means they are backed by collateral — your home. If you are unable to pay these loans back, you risk losing your house to the lender.

You also must have sufficient equity in your home to qualify for a HELOC. The Federal Trade Commission says you may be able to borrow up to 85% of the appraised value of your home less the amount you owe on your first mortgage.

Pros: It’s fairly easy to get one of these loans when you have sufficient equity in your home. The interest you pay on the loan is tax deductible. With a HELOC, you only withdraw the amount of money you need. This may leave you additional funds for emergencies.

Cons: You risk losing your home if you don’t pay as agreed. Both of these options feature variable interest rates. That means your payment fluctuates with the market.

Loan from your 401(k)

How it works

If you have a 401(k) retirement savings account with your employer, you might be able to borrow money from the account. Because you are borrowing money from yourself, you won’t require a credit check or pay any interest. You can take up to five years to pay back the loan, unless you quit working there. If you leave your job, you must pay the loan back within 60 days, or you’ll be penalized for an early withdrawal if you are not retirement age.

Pros: There is no credit check or interest to pay. You can take your time paying back the loan as long as you stay employed.

Cons: You won’t earn interest on the money you remove from the account. If you are terminated from or quit your job, you must pay back the loan within 60 days or pay a stiff early-withdrawal penalty.

Medical procedures and the expenses that come with them are a fact of life. How you deal with those fees will affect your financial health. Take a look at SuperMoney’s Best Personal Loans Reviews and Comparison for the ideal funding option for your financial situation.

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