Medical costs. Stethoscope on the dollars. concept: medical loans
Cedric Jackson
By: cjackson
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What Are Medical Loans?

Medical bills can be a complicated matter: it is often difficult to calculate costs for care. And while medical treatment for a severe injury or illness can lead to cost-prohibitive procedures and dramatic financial burdens, there are always ways to finance these expenses.

Medical loans are one option available to individuals facing steep medical costs. If you have medical bills that have grown beyond your means to repay, you may be considering one. 

But, of course, these types of loans have pros and cons, like all kinds of financing. So you must understand precisely what they are, how they work, and what will be required of you after agreeing to one. This knowledge protects you from signing up for something that is not right for you—or makes your situation worse later on.

Just remember to consider your alternatives before taking out a medical loan. Make sure to discuss your options with trusted friends, family, and financial advisors. Medical loans are complex and often involve high amounts of emotion or stress. 

In this article, we will go over the pros and cons of medical loans to help you figure out if they are the right option for you.

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What Is a Medical Loan?

A medical loan is a type of financing designed to help people cover their medical bills and expenses. Lots of personal loans can be used or tailored for medical costs, such as treatments, procedures, prescriptions, and surgeries. 

Some people use medical loans to cover fertility treatments, while others use them to cover unexpected major expenses related to an illness or injury. 

Many lenders, including credit unions, banks, and online lenders, offer personal loans tailored for medical treatments.

How Do Medical Loans Work?

Medical loans can be unsecured loans. This means that they do not require collateral as part of the loan process. Lenders want to know whether you will be able to repay your loan, though, so applications tend to focus on your income and credit score. 

Many lenders also offer secured personal loans designed for medical costs. Secured medical loans require collateral, but you can often get better interest rates.

The difference between secured and unsecured loans

Your credit history, income, potential collateral, and a variety of other factors influence your interest rates. But they also determine how much lenders may be willing to offer you. Keep this in mind and shop around for different lenders to get the best deal.

doctors, vector image, illustration. concept: medical loans

The Pros and Cons of Medical Loans

Medical loans have a few potential advantages. 

  • You can often get quick access to your loan funds. If you have a medical emergency, this can be one of the most important advantages. After your application is approved, many lenders will have your funds available to you within a few business days. 
  • Medical loans also can be less expensive than credit cards or other ways to pay for medical expenses. But your credit score has a lot to do with this factor. If your credit is good, you can likely get a medical loan with a 6% APR. The average credit card’s APR is at least twice this rate.

However, medical loans are not without their potential drawbacks. 

  • They can be an expensive way to finance your medical costs. You may qualify for lower interest rates, but if your credit score is not great, you probably will pay about what you would with another loan. That means you may have to pay back a lot more than you borrow over the life of the loan. 
  • Medical loans do not lower your costs. If you are already having trouble paying your medical expenses, you may need to consider another option.

Stethoscope And Calculator. Concept: medical loans

Never make a major financial decision (like getting a loan) without giving yourself time to understand and weigh the potential pros and cons. 

Alternatives to Medical Loans

Medical loans are not always the right answer. Thankfully, you have other financing options to help you with medical expenses. 

1. Hospital Financial Programs

Often, patients who have trouble making payments or who cannot afford to repay can receive reduced-cost care. In some cases, care may even be offered for free. Make sure to ask about these options when talking with your medical team. 

Hospitals often offer programs to give financial aid to individuals who cannot afford expensive medical bills. These programs usually consider your income, assets, and whether your medical situation is necessary. (In other words, do not expect elective procedures or treatments to be covered.)

Hospitals and doctors also are usually willing to tailor payment plans for your situation. Make sure to discuss this if you think you can repay your medical expenses but need to make smaller payments over more time. 

You can also check on hospital websites or with their customer service departments. Discounts are often available but are unlikely to be offered unless you ask. This is especially true if you do not have health insurance or qualify for free care. 

Each hospital sets its own policy, but most are willing to work with patients. Discounts can even be up to 50 percent of the costs of procedures and treatments in many cases. You can also try to negotiate for a lower payment.

2. Medical Credit Card

Also, you can try to get a medical credit card from your healthcare provider. These cards can only be used for medical expenses at providers that accept them. Some of them come with deferred interest, giving you the potential to pay off your loan before interest begins to build. 

After you use the card to pay your doctor, you then need to repay your insurance company. But be careful: If you use a medical credit card, you may become ineligible for any financial assistance on your bills. Weigh this carefully. Regular credit cards can also be an option if your APR is low enough.

Make sure to keep a close eye on your bills, too. If you see anything that does not make sense or was incorrectly charged, bring it up with your medical provider as soon as possible. This ensures you do not end up repaying costs for treatments or procedures you did not receive.

3. Personal loans

As we mentioned, medical loans are just personal loans designed to be used for medical expenses. But you don’t need to just look for lenders specialized in the medical industry. You could also use a regular run-of-the-mill personal loan to pay for these types of expenses. Just make sure to compare APRs and make sure that the lender you’re eyeing allows for the loan to be used for medical expenses.

Attractive female doctor working on her laptop with healthcare colleagues in her office. concept: medical loans


If you have trouble repaying medical bills or are worried upcoming costs may pose a problem, medical loans are a potential solution. Be careful that you weigh all your options first. 

Medical loans may be right for you, but do not feel pressured into any financing. You need to know that a medical loan is within your means to repay. Otherwise, your situation could become worse later on. 

Ideally, growing your business will help give you the financial stability to prepare for any medical expenses in the future. But if you are in urgent need, a personal loan could be what you need. Consider contacting our trusted partner for help weighing your options. 

At Camino Financial, our motto, “No business left behind,” is about more than just the businesses we help—it is about the people at the heart of those businesses. At the end of the day, our clients and readers are people first, and their needs are paramount. If our team can be of any assistance, we’ll always be excited to help you.

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