When a medical crisis hits, one of the first things you may be thinking—but one of the last things you’re prepared for—is how to meet the financial burden of your diagnosis. In the case of cancer, patients have to contend with co-pays, treatment costs, medication regimens, leaves of absence from work and many more factors that can cause the medical bills to pile up, and debt to quickly climb. Thankfully, like other big-ticket expenses in life, there are loans available that can help patients confront some of that debt.
If you’re exploring how to get a loan for medical expenses, the first thing to consider is the source, as everyone from banks to healthcare providers to private organizations have begun offering medical loans. The type of loan is also key, as each has a set APR that could end up pushing accrued interest sky-high and a term length that must also be evaluated realistically in light of the patient’s financial situation. It’s important to establish whether you want a fixed or variable loan rate—the first of which guarantees a locked-in interest rate, and the latter that can change over time. Eligibility is also a consideration, as personal loans all have varying requirements for applicants, particularly around credit score.
Another avenue for getting a loan to cover medical expenses is through life insurance. In some cases, policyholders can borrow against their policy through a collateral assignment, which involves transferring the policy into the lender’s name so that that entity is the primary beneficiary. Alternately, options like Life Credit’s Living Benefits Loans also allow you to borrow against the value of your life insurance policy without losing ownership of it. This program is not a bank loan, so clients do not need to jump through the many hoops such loan programs often set up; instead, those with at least $75,000 of life insurance and who have been diagnosed with a serious medical illness may qualify for up to 50% of their policy’s death benefit.
For those exploring how to get a loan for medical expenses, doing your research — on the lending company, the type of loan, and your own financial picture — can be a significant time- and money-saver in the long run.