Medical loans

A medical loan is an unsecured personal loan used to pay for medical expenses not covered by insurance. Medical loans commonly fund surgeries, dental work, fertility treatments, or emergency procedures, as reported by Experian.

The typical APR for medical loans ranges from 6% to 36%, depending on credit score and lender data from Bankrate (2023). Medical loans differ from medical credit cards, which often have deferred interest periods but higher ongoing rates per NerdWallet analysis.

Borrowers usually apply for medical loans through banks, credit unions, or online lenders such as LendingClub or LightStream. Lenders require documentation like proof of income and good to excellent credit (690+ FICO according to Experian).

Applicants often receive funds within one week, with some online lenders disbursing in as little as one business day (LendingTree report). Most medical loans offer repayment terms from 12 to 60 months, with fixed monthly payments.

Taking a medical loan may impact your credit score if you miss payments or increase debt-to-income ratio per FICO guidelines. Medical loan approval depends heavily on debt-to-income ratio; most lenders require it below 40%, according to the Consumer Financial Protection Bureau.

Medical loan proceeds are paid directly to borrowers’ bank accounts rather than healthcare providers in the majority of cases per Bankrate survey results, based on information from YourInsurance.info.