Medical Financing – How to Cover Healthcare Obligations?
Banks and private clinics began to issue loans to citizens to pay for medical services and purchase health insurance policies, questioning the well-established truth that good health is above wealth. The appearance of such a product was recently announced by credit institutions.
Medical financing even with a bad credit is a relatively new product on the worldwide market. Although it does not exist in a single instance. Previously, some medical institutions, usually of a network format, have already announced the possibility for citizens to obtain borrowed funds from a number of banks on similar terms: with zero down payment, up to 1.5 years and a rate above 10-15% per annum.
In the USA, there are several ways to get a loan for health financing.
Ways to get a loan for medical services:
- loan for treatment through a payday lender;
- consumer financing for healthcare services;
- credit cards.
Payday medical financing
Payday lenders can quickly arrange for you a loan with minimal requirements:
- The minimum package of documents (identity card, TIN, details of the card or current account in the bank where the funds will be transferred);
- Absence of excessive requirements to the client, in particular on official income;
- Ease of receiving money without collateral and a guarantor;
- Speed of loan processing.
Also, many payday lending services issue the first loan either without commission or with a reduced rate.
You can apply for a payday loan to cover medical services completely online, for this you need to be between the ages of 18 and 65 and be a citizen of the United States. Each company may ask you to provide additional documents.
If you are a pensioner, you will also be able to get a loan, but the rates will be higher.
Consumer credit for treatment
Most banking organizations issue ordinary consumer loans for medical services.
It may be necessary to attract guarantors to obtain loans from a bank. They will guarantee that the borrowed funds will be paid to the bank back in full. If the client is unable to repay the next payment at some point, these responsibilities will be transferred to the guarantor.
Also in this case, the bank may be required to issue an insurance policy. Thus, the bank will receive guarantees that the client will have to repay the loan in case his health deteriorates.
The bank manager may additionally request extra papers on the state of health, diagnosis and prognoses of doctors.
Banks will need to check the borrower’s credit history, as well as his solvency. If the amount provided is large, you may need property that can serve as collateral.
Credit cards as a medical financing
A credit card deserves special attention among consumer money borrowing programs. These are the most common types of loans issued by the bank. After the execution of the contract between the client and the issuer, the agreed amount is credited to the card balance.
The revolving credit limit can be used repeatedly by making various purchases or withdrawing cash. This type of consumer lending is simple, convenient and safe for a wide audience.
Credit сard pecularities are:
- grace period without interest accrual;
- unlimited period of use, subject to timely reissue;
- mandatory minimum payments after borrowing money;
- a fairly high interest rate charged at the end of the grace period;
- cashback, bonuses, discounts, promotions, miles and other incentives for loyal customers;
- the possibility of increasing the credit limit with regular use of the card.
Personal loans for medical expenses
This is a targeted loan that is issued to pay for medical services, such as expensive surgical interventions, dental services, plastic surgery, as well as for the purchase of medicines, treatment in a paid hospital, laboratory tests. Funds under the contract are transferred to the medical institution chosen by the client.
Getting a loan from a bank involves more favorable terms than getting a loan directly from a medical institution, so if you have time, choose getting a loan from a bank. To protect their rights, it is a prerequisite to preserve all treatment documents: contracts, certificates, checks, examination results, extracts, a copy or original extract from the patient’s medical record.
Pros and cons of medical financing
Consumer healthcare financing has both positive and negative sides, so the decision to take a particular consumer loan is always your choice.
The main advantages of such a lending are as follows:
- it is possible to use money immediately, without wasting time on accumulating the necessary amount;
- with the help of a credit, you can make a purchase at a favorable price, without waiting for the price of goods to rise, including goods for promotions / sales;
- with the money taken on credit, you can have time to purchase goods, the number of which is limited;
- the loan received can be spent on any needs including health financing;
- minimum requirements for the borrower;
- possibility of early repayment without penalties (in most banks);
- if a consumer loan is issued as an installment payment, this will reduce the financial burden on your budget, since you will not have to pay the entire amount at once.
The main disadvantages of a consumer loan:
- refund of funds with interest overpayment;
- regular payments of this loan from own income;
- you may not like the product, but you will still have to pay for installments / credit for a certain time;
- high interest rate (it is determined individually for each client);
- the risk of delaying payments due to unforeseen financial expenses from your own budget, eventually receiving penalties from the bank and ruining your credit history, as a result, you will experience difficulties trying to take out such a loan in the future;
- if you are unable to pay the loan for a long time, there is a risk of going to court with the bank or communicating with collectors who will withdraw your debt.