How to Finance Medical Expenses
Updated
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Covering the cost of medical care can be challenging, but a personal loan may help. Here, we'll cover the average cost of medical expenses, how personal loans work, and other options for covering the sometimes shocking expenses.
Here's a rundown of some average costs:
| Procedure | Average Costs |
|---|---|
| X-ray | $50 - $1,000+ |
| Blood test | $300 - $650+ |
| ER visit | $700 - $3,400+ |
| Urgent care | $80 - $800+ |
| Pre-natal care | $90 - $500/visit |
| Gall bladder removal | $5,500 - $17,000+ |
| Appendectomy | $33,000 - $48,000+ |
Personal loans are one option for paying medical costs. Before taking on a medical loan, remember that you can negotiate. A medical facility or doctor's office billing department can discount your bill or help you set up a payment plan. It may even walk you through the steps you must take for bill forgiveness or point you toward an agency that can help.
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Fixed: 8.99%-29.99% APR (with all discounts)
|
$5,000 - $100,000
|
680
|
|
Apply Now for Discover Personal Loan
Powered by Credible
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
7.99% - 24.99%
|
$2,500 - $40,000
|
660
|
Apply Now for Discover Personal Loan
Powered by Credible |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
6.70% - 35.99%³
|
$1,000 - $50,000¹
|
300
|
A personal loan is money you borrow from a lender and repay with interest, typically in monthly installments. There are two types of personal loans -- unsecured and secured. An unsecured personal loan means you don't have to put up collateral for the loan. A secured loan requires you to put something of value up. While a secured loan may land you a lower interest rate, you risk losing your collateral if you miss payments.
If you're considering a personal loan to pay medical costs, it's wise to consider the pros and cons.
Pros
Cons
The best time to consider pros and cons is before applying for a loan.
The goal is to qualify for the lowest possible interest rate. Here are some of the factors lenders consider when deciding your rate.
The higher your credit score, the better your chances of landing a low rate. If your credit score is low, consider boosting it before applying for a loan. Remember that medical bills may come due before your score has time to rebound. If that's the case, speak with the medical provider or facility you owe money to, explain your situation, and negotiate a compromise.
To determine that you can afford monthly payments, lenders ask for proof of employment status and how much money you earn. The more secure your financial situation appears, the less you're likely to pay in interest.
You will typically be offered a lower interest rate when taking out a secured loan. The fact that you're putting something of value up as collateral means the lender can repossess the collateral if you miss payments. Carefully consider whether a lower rate is worth the risk.
Lenders consider longer-term loans risky because there's more time for things to go wrong with your finances, and they frequently offset the additional risk by charging a higher interest rate. The workaround is to take out the shortest-term loan you can afford, hopefully leading to a lower rate.
If you decide that taking out a personal loan to pay medical expenses is the right move, here's how it's done.
High credit scores reap the reward of lower interest rates and loan fees. Before proceeding, check your credit score and order a copy of your credit report. If your score is low, take steps to boost it.
Determine how much money you'll need to pay the medical bills. Next, decide if you have any cash available to put toward the debt or if you want to borrow the entire amount.
Check several lenders, remembering that interest rates only tell part of the story. Look at the annual percentage rate (APR). The APR includes interest, fees, and other charges, giving you a better idea of how much the loan will cost.
Once you've shopped lenders and know which offers the lowest APR and best repayment terms, fill out a loan application. If approved, read over the loan agreement and ask questions if there's anything you don't understand. Sign the loan agreement, wait for loan proceeds, and plan to make your first payment approximately one month later.
If you're fortunate enough to have health insurance (at least 27 million Americans don't), it should be your first line of defense against high medical bills. If possible, present your medical card before treatment to avoid any confusion. If your medical situation is not an emergency, call your insurer to find out how much of your expected treatment will be covered and how much you'll be out of pocket.
If you have a high-deductible health insurance plan, you may have either a health savings account (HSA) or a flexible spending account (FSA). Both allow you to save money in a tax-free account and use those funds to pay for medical expenses. While it's never fun to drain an account you've spent months building, HSAs and FSAs are a great way to knock out an unexpected medical expense.
Medical credit cards are similar to regular credit cards. However, there are two key differences. First, medical credit cards can only be used to pay for medical services. Each card type is accepted within a specific network of providers.
Second, medical cards usually offer deferred interest. You may get 0% interest for a set period, but unlike a 0% intro APR credit card, that interest can still come back to bite you. If you don't pay the debt in full within the deferred interest period, you'll need to pay the remaining debt plus all the interest that's accumulated.
Do you have money put away in an emergency fund? Is your savings account healthy? It often makes most sense to pay a medical bill with those funds. However, only use this method after you have negotiated with the provider for a lower price.
Search online for "assistance programs in (your county)" to find a list of programs available to residents of your area. If you don't find anything helpful, contact a local social service agency and ask for advice.
Most medical facilities, particularly nonprofit ones, have a charity care program designed to reduce or cover medical bills for those in need. Do not be shy about asking. Again, it's the people working in the billing department who tend to have their ears to the ground.
Ask about monthly payments. Be honest about how much you can afford to pay and do not cut your budget short. Let's say your son broke his arm, and you received a statement for $1,200.
Before calling, you decide that you can afford to pay $50 per month. You explain your situation and ask for a discount. The medical provider cuts the amount owed down to $1,000. By paying $50 per month, you'll have the debt paid off in 20 months. This is common, so always ask.
Life is about being practical, which can be frustrating when it comes to unwanted bills. Ask yourself these questions before deciding whether a loan is right for you:
The goal is to settle on a plan that allows you to get back to what's important -- taking care of your health.
It's not uncommon for medical providers to help patients reduce their bills to a more manageable number. After all, getting paid something is better than learning that a patient has filed for bankruptcy protection and the provider will receive nothing.
Your credit score impacts whether you're approved for a loan and determines how much you'll pay in interest and loan fees. Whether you're considering a personal loan or not, it's always a good idea to boost your credit score -- just in case you apply for credit in the future.
Explain your situation. As mentioned, medical providers deal with payment issues daily. If you haven't tried to negotiate your total bill yet, now is an excellent time to do so.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount.
SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice.Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
*Upstart Loan Disclaimer
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount.
SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice.Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
*Upstart Loan Disclaimer
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
