5 Best Medical Loans for Surgery and Other Medical Bills
An estimated 27.5 million Americans were uninsured in 2018. Without insurance, a broken leg could set you back $7,500, and a three-night hospital stay could cost around $30,000. Few Americans could pay for those kinds of unexpected costs out of pocket, much less expected expenses like in vitro fertilization or weight loss surgery.
One way to pay for these costs is with a medical loan, which is an unsecured personal loan that can be used to cover almost any type of procedure or treatment. Below, you’ll find our picks for the best medical loans available among lenders we partner with. But buyer beware: A medical loan may not be your best option for funding medical costs. (More on that below.)
- 5 best medical loans for surgery and other needs
- Think twice before taking out a medical loan
- 3 alternatives to a medical loan
- How we selected lenders
5 best medical loans for surgery and other needs
1. Best Egg
|APR range||5.99% – 29.99%|
|Loan terms||36 or 60 months|
|Loan amount||$2,000 –$35,000|
|Origination fee||0.99% - 6.99%|
|Minimum credit score requirement||640|
Best Egg has a reasonable minimum credit requirement for borrowers, and a decent minimum borrowing limit. With the majority of Americans having a FICO® Score of 670 or higher, Best Egg can be a viable option for many borrowers looking to fund a medical cost. Adding to that, Best Egg can fund your loan in as little as one business day after loan approval and vertifications.
To qualify for the lowest APR, however, you’ll need a minimum 700 FICO Score and $100,000 in individual annual income. And no matter how good your credit may be, you’ll pay an origination fee, which isn’t always the case for other lenders included here.
|APR range||8.69% – 35.99%|
|Loan terms||36 or 60 months|
|Loan amount||$1,000 – $50,000|
|Origination fee||Is Up to 8.00%|
|Minimum credit score requirement||600|
Like Best Egg, Upstart has only two term lengths to choose from. But Upstart offers a wider range of borrowing limits and a lower minimum credit requirement for medical loans. In fact, they may accept applicants who don’t have a credit history so they can begin generating a FICO Score. In exchange, you’ll find a high maximum APR.
Upstart is the only lender on our list where you may avoid an origination fee, though they aren’t clear on who’s entitled to that benefit.
|Standard program||Exceptional program (offered through LightStream)|
|APR range||7.95% – 35.99%||5.95% – 16.79%|
|Loan terms||36 or 60 months||24 to 84 months|
|Loan amount||$2,000 – $40,000||$20,000 – $100,000|
|Origination fee||2.41% - 5.00%||No origination fee|
|Minimum credit score requirement||640||740|
Prosper offers two unique medical loan programs: “standard” and “exceptional.”
A standard program loan will suit most borrowers with its lower minimum credit requirement and lower borrowing minimum. Compared with other loan products reviewed here, this medical loan could be a good backup option to Best Egg or Upstart, depending on your financial situation and needs. That’s because this medical loan has an unavoidable origination fee and the same restrictive loan terms.
The exceptional program loan, meanwhile, is a great option if you have at least a 740 credit score and need a large medical loan. This medical loan has a highly competitive APR range, and loan amounts climb as high as $100,000. No competitor on this list comes close to that maximum borrowing limit.
|APR range||10.68% – 35.89%|
|Loan terms||36 or 60 months|
|Loan amount||$1,000 – $40,000|
|Origination fee||2.00% - 6.00%|
|Minimum credit score requirement||Not specified|
LendingClub is a peer-to-peer lending marketplace where borrowers can access funds for a variety of purposes, including medical expenses. While you can easily apply for a personal loan through the marketplace, interest rates can be steep for borrowers with less-than-stellar credit. However, you can often find out if you’re approved for a loan and have funds in your bank account within seven business days.
LendingClub also offers a separate patient financing program that includes a fixed interest rate installment loan and two promotional interest lines of credit. However, this option is limited to medical providers who have enrolled in LendingClub’s program, and your payment options are limited based on the care you seek.
|APR range||9.95% – 35.99%|
|Loan terms||24 to 60 months|
|Loan amount||$2,000 – $35,000|
|Origination fee||Up to 4.75%|
|Minimum credit score requirement||600|
Avant can be an ideal solution if your credit ranges from fair to average and you’re struggling to find a medical loan for surgery or some other need. The origination fee can also be competitive compared with other options found here.
However, you’ll find a higher APR range, which is to be expected among lenders with less restrictive credit requirements. On the plus side, you can get loan funding by the next business day after loan approval.
Think twice before taking out a medical loan
While a medical loan may provide fast cash and a means of covering your medical expenses without the need for collateral, there are several drawbacks to taking out loans for medical bills:
- You’ll likely pay a high interest rate because even the best medical loans are unsecured and the lender takes a larger risk. An excellent credit score will usually land you an average rate of 7.63%, while a subprime borrower will pay an average of 26.15% in interest, according to our study on personal loans.
- You may pay an origination fee that is equal to a percentage of your total loan amount. This amount may be deducted from your funds before they’re released to you.
- Most medical loan providers cap the amount you’re allowed to borrow. With some treatments costing tens of thousands of dollars, a loan for medical procedures may not provide you the funds you need to cover a vital procedure either.
Before signing on the dotted line, consider alternatives to taking out a medical loan.
3 alternatives to a medical loan
1. Negotiate your medical bills
Don’t be afraid to ask your hospital or doctor’s office how to get a discount on medical bills. In certain situations, especially for procedures you plan on having (as opposed to an emergency room visit), you can negotiate the bill down to a more manageable amount. You can also offer to pay some of the medical costs upfront and potentially save as much as 20%.
Follow these steps to get started:
- Reach out to your health care provider’s billing department and ask for an estimate for your treatment. Also request a detailed list of each expense and item the hospital will charge you.
- Find out how much your insurance will cover so you have an idea of your financial obligations after insurance kicks in. You may have to pay a certain amount before your insurance provider pays out if you have a deductible.
- Speak to a senior member of the billing department and share how much you’re able to pay. Don’t be afraid to haggle or ask them to remove unnecessary items. For example, if you’ll require crutches but already have some from a recent procedure, you can ask for the billing department to remove them from the bill.
Some health care organizations may offer to set up a payment plan for you or connect you with a payment assistance program. The hospital or lab should be able to connect you with local charity programs, but you can also contact your state or local social services agencies to find out if you qualify for a health care assistance program in your area.
2. Set up a payment plan
One of the most effective means of paying for health care may be to simply ask your hospital or care provider to help you figure out a payment plan. Nearly all health care institutions and labs provide some type of zero interest repayment plan that allows you to spread the payments out over time instead of paying a large lump sum.
Organizations like the Johns Hopkins All Children’s Hospital offer patient families interest-free payments plans to help cover treatment costs. You most likely won’t have to meet any criteria and just need to make regular payments to avoid damaging your credit or dealing with collection agencies.
3. Use CareCredit
CareCredit is a type of medical credit card that lets you pay for health care treatments if your insurance doesn’t cover them or if you’re uninsured. While you can apply for CareCredit online, other credit cards for medical bills may require you to apply at the hospital or doctor’s office. It’s also important to remember some CareCredit alternatives only cover certain procedures and non-elective surgeries.
CareCredit offers no interest if you pay off your balance within 12 months. If your balance isn’t repaid in full within those 12 months, however, you’ll be charged interest from the original purchase date. (CareCredit’s APR jumps to around 26.99% after the deferred interest period.)
The Wells Fargo Health Advantage® Card lets you pay for certain types of care including dental, hearing and vision. The card comes with a 12.99% Variable APR along with special financing promotions, depending on where you live and the type of care you need. Make sure to use the website’s search option to find out if your health care provider accepts the card.
How we selected lenders
To select lenders for this article, we used MagnifyMoney’s personal loan marketplace on Jan. 21, 2020. We assumed the following:
- Credit score of excellent (720–850), good (680–719), fair (640–679) or poor (below 640)
- Loan amount of $2,500
- Zip code: 11220
We did not consider lenders that do not have a specified minimum credit score requirement. The top three lenders (according to minimum APR) for each credit profile were then considered.