If you’re looking to consolidate medical debt or planning on financing a surgery, the right medical loan could help you handle these expenses and save on interest charges. Many people struggle to come up with the cash for health care when insurance doesn’t cover the bill.
Here’s what you need to know to help you find the best medical loan.
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Lender |
Learn More |
APR |
Max. Loan Amount |
Min. Credit Score |
|---|---|---|---|---|
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6.24% to 10.24% | $50,000 | Not disclosed | |
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6.74% to 17.99% | $50,000 | 650 | |
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5.99% to 24.99% | $35,000 | 660 | |
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3.99% to 19.99% | $100,000 | 670 | |
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6.99% to 22.23% | $100,000 | Not disclosed | |
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6.99% to 19.99% | $40,000 | 660 | |
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Not disclosed | $50,000 | Not disclosed | |
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5.99% to 24.99% | $40,000 | 600 | |
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5.99% to 35.99% | $50,000 | 640 | |
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6.99% to 19.49% | $50,000 | 660 |
If you need money fast, Alliant Credit Union typically makes same-day online personal loans between $1,000 and $50,000. The $14 billion Chicago-based credit union, founded in 1935, is one of the biggest in the nation, with 600,000 members. In addition to personal loans, Alliant offers home and auto loans, credit cards, checking and savings accounts, individual retirement accounts, trust accounts, and insurance policies.
Although PenFed Credit Union – officially Pentagon Federal Credit Union – serves members of the armed forces, military associations, veterans and retirees, and their families, a military connection is not required to become a member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states, as well as in Guam, Puerto Rico and Okinawa, Japan.
Discover is a digital bank and payment services company known for its credit cards. But Discover also offers other products, including fixed-rate personal loans of up to $35,000 to borrowers nationwide. The lender charges no fees as long as you pay on time.
LightStream is the online consumer lending division of Truist, which formed in 2019 from the merger of BB&T and SunTrust. SunTrust acquired the assets of online lender FirstAgain in 2012 and relaunched the business as LightStream. LightStream’s online personal loans range from $5,000 to $100,000 and can be used for nearly any reason. Personal loans are available to borrowers nationwide with good to excellent credit.
SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The nationwide lender was founded in 2011 and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, auto and student loan refinancing, home loans, and small-business financing.
Marcus is the consumer bank and lending arm of investment bank Goldman Sachs. Established in 2016, the lender offers personal loans of up to $40,000.
Upstart is a lending platform that uses artificial intelligence to improve access to affordable credit. Based in California and founded by former Google employees in 2012, Upstart also applies AI to reduce lending risks and costs for its bank partners. The lending intermediary provides unsecured personal loans from $1,000 to $50,000 to borrowers anywhere in the U.S. except West Virginia or Iowa.
Happy Money offers Payoff personal loans designed to consolidate credit card debt. It operates in all but two states and provides loans of up to $40,000. Happy Money is not a bank and instead works with lending partners that originate the loans. The California-based financial wellness company takes a psychological approach to money matters.
Best Egg is an online lender founded in 2014 that financial technology company Marlette Holdings Inc. owns and operates. Best Egg offers personal loans starting at $2,000 that can be used to cover medical bills, home remodeling and a variety of other expenses. Cross River Bank in New Jersey issues Best Egg loans, which can be funded in as little as one business day.
U.S. Bank has physical locations in more than 25 states and offers both short- and long-term personal loans with fixed annual percentage rates. Current customers may qualify to borrow up to $50,000 with a credit score of 660 or above, and options are available for noncustomers willing to open a checking or savings account.
Personal loan interest rates rose this week, trending higher for three-year and five-year loan terms. Here are the average personal loan rates offered to well-qualified applicants with a credit score of 720 or greater, as of Nov. 28:
- Three-year personal loan term: 14.45% (down from 15.77% a week ago).
- Five-year personal loan term: 15.75% (down from 16.97% a week ago).
Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit, as seen in the chart below:
Select your desired loan amount and loan purpose, your credit score range and your state to see estimated annual percentage rates and loan terms.
A medical loan is typically an unsecured personal loan that can be used for medical expenses. An unsecured loan does not require collateral, such as a car, home or savings account, for approval.
Your loan funds can be applied toward just about any medical cost, from bills to living expenses while you recover from an illness or accident.
You can also use a medical loan to consolidate medical bills. If you qualify for a loan with a low interest rate, you could simplify your monthly budget and save on interest.
Here are some examples of what medical loans can cover:
- Health insurance deductibles.
- Out-of-network charges from your health insurer.
- Copays.
- Dental procedures.
- Medical treatments, including infertility treatments.
- Physical therapy and rehabilitation services.
- Weight loss surgeries.
- Cosmetic procedures.
Loan qualification is usually based on the borrower’s credit history and income, but each lender sets its own criteria. Here’s what most lenders evaluate when you apply for a medical loan:
- Income. Lenders may set a minimum monthly or annual income, or they may simply check that you earn enough to cover your loan payment. Generally, a higher income may qualify you to borrow more.
- Credit score. A good credit score could help you get approved for a lower interest rate, which saves you money. Applicants with bad credit or no credit often pay higher interest rates than borrowers with good credit.
- Credit report. Lenders might also look for negative items on your credit report, such as late payments or collection accounts. Even with these items on your record, you might still qualify for a medical loan.
- Loan terms. “The actual terms of the loan – how much loan you are looking for, the length of the term – may impact the interest rates you can qualify for,” says Elise Nussbaum, a financial coach with TrustPlus, a service of Neighborhood Trust Financial Partners, which offers financial wellness benefits.
Benefits
- Consolidate your loans. Medical loans can be used to consolidate medical debt, which allows you to combine multiple high interest loans into one lower interest payment.
- Receive necessary medical care. If you require necessary or urgent medical assistance and can’t afford it, medical loans will allow you to get the treatment you need.
- No collateral required. Most medical loans are unsecured and don’t require a house or car as collateral.
Drawbacks
- Pay more. Personal loans tend to have higher interest rates than other forms of financing, but you may be able to get a lower rate depending on your credit score.
- Immediate funds not guaranteed. Some medical loans can take up to a week to finance, which may not be quick enough in an emergency. If you need funds immediately, some lenders may provide funding within 24 hours, but it’s not as common.
If you’ve determined that a medical loan or dental loan is right for you, here is how to apply for one:
- Figure out how much you need to borrow. Ask your health care provider for an estimate, and find out whether you can negotiate the price, qualify for financial assistance or enroll in a payment plan. “These options might even be preferable to a medical loan,” Nussbaum says.
- Check your credit. You’ll need a strong credit history to receive the best interest rates, says Leslie Tayne, a New York-based debt resolution attorney and personal finance expert. A high credit score translates to a lower risk of loan default for the lender. “In this instance, a good credit score is 700 or higher,” she says.
- Research lenders and loan options. Try to get three to five loan estimates, and then compare loan amounts and terms, qualification requirements, interest rates, and fees. Some lenders let you prequalify online, which means they estimate rates and other loan terms with a soft credit inquiry that won’t hurt your credit score. Don’t forget to check reviews, ratings and complaints using resources such as the Better Business Bureau and the Consumer Financial Protection Bureau’s Consumer Complaint Database.
- Select a lender and apply. If you’re approved, read the fine print, Tayne advises. Make sure you understand your interest rate and all fees and penalties before signing on the dotted line.
- Receive the funds. You might need to wait a few days for the money to hit your bank account, depending on the lender, and then you can spend it on your medical expenses.
Be sure to compare lenders before determining which medical loan is right for you. Consider the following factors:
- Annual percentage rates. Be sure to look at both the interest rate and APR to make sure you have a complete picture of the overall cost of each loan you consider.
- Loan speed. Consider how quickly you need money to hit your account and each lender’s application process. Some lenders may fund a loan within 24 hours, while others can take up to a week.
- Loan terms. The length of the loan will affect your monthly payment and the total cost of borrowing money. Consider whether you need a lower monthly payment or would rather pay off the loan as quickly as possible.
- Fees. Some lenders charge origination fees to cover the cost of lending money, and these fees can range from 1% to 10% of your loan amount. Be sure to note a lender’s origination fee, since it will likely reduce the loan proceeds you actually receive.
Find the Personal Loan That’s Right for You
Weigh the pros and cons of a medical loan before using one to pay for medical expenses. In many cases, “It may make sense to take out a medical loan when faced with necessary medical expenses where you cannot pay for it yourself and your insurance doesn’t entirely cover the procedure,” Tayne says.
But also consider whether:
- You can qualify for good loan terms. Before taking out a medical loan, research the fees – and when they apply – and know the interest rate you will pay. The National Consumer Law Center, a nonprofit advocacy group, says loans with fixed APRs of less than 36% are generally considered affordable. Of course, a lower rate could help you save more money.
- You can get the funds quickly. This is especially helpful in a medical emergency or if you need to pay your doctor a deposit or buy medicine before a procedure.
- You can use the funds to pay for medical expenses. Read the terms and conditions before signing for the loan, because some lenders may restrict usage.
A medical loan might not be your best option if:
- You will have high loan costs. Extra fees and steep interest charges can quickly drive up your loan balance and cause you to fall behind on payments. “When left unpaid, bills can turn into unmanageable medical debt,” Tayne says.
- You can find cheaper options. Because debt can lower your credit score and strain your budget, always research affordable alternatives. If there are none, Nussbaum says, “Some deep consideration would need to happen if the loan payment per month is unaffordable for the individual’s budget.”
- You can’t borrow the amount you need. Lenders usually set lower and upper limits on how much you can borrow. If the amount you need falls outside of this range, you might need to consider alternatives.
If a medical loan isn’t right for you, keep in mind that you have other choices, such as:
Review your medical bills for errors. Call your provider to resolve billing questions, or consider using a third-party service, such as CoPatient, to review your medical bills for errors and savings opportunities. “With complicated codes and miscellaneous fees and charges, it’s entirely possible that you were overcharged or incorrectly billed,” Tayne says.
Negotiate your medical bills. Some doctors’ offices and hospital billing departments will reduce your balance if you can show proof of hardship, Tayne says.
Just know that not all providers can negotiate, Nussbaum says, and those that do may have limited flexibility. “Medical expenses are also expensive in general, and so there might be a floor in terms of negotiating limits,” she says.
Ask about a payment plan. Your health care provider may be able to spread out the amount due over 12 or 18 months with no interest, Tayne says. “That’s a great alternative to a loan with interest – and it doesn’t hit your credit,” she says.
Open a medical credit card. Your doctor may offer a medical credit card with deferred interest for a limited time on eligible health care expenses. You will need to pay off your balance before the promotional rate expires to avoid retroactive interest charges.
Use a credit card with a 0% introductory APR. Some traditional credit cards offer a 0% APR for 12 to 21 months and earn cash back rewards or airline miles for your spending. Plan to pay off the balance before the standard interest rate applies.
Use a personal line of credit. This is typically an unsecured revolving line of credit with a variable interest rate, and you can draw from the account as needed and pay it back with interest, like a credit card. Personal lines of credit range from about $5,000 to $500,000, and interest rates can be lower than credit cards, but you will need a strong credit history to qualify.
Tap home equity. If you have 15% to 30% equity in your home, then you may qualify for a home equity loan or line of credit, called a HELOC. But your property is collateral for the loan, and you risk losing it if you can’t keep up with payments. “Avoid these if at all possible,” says Barry Coleman, vice president of counseling and education programs at the National Foundation for Credit Counseling.
Consider a 401(k) loan. Loans are capped at the lesser of $50,000 or half of your vested account balance, and repayment must occur within five years. If you leave your job before you pay off your 401(k) loan, you could end up trading your medical bills for a huge tax bill or an insufficient retirement fund.
Explore state assistance programs. If you need more help paying for or getting medical care, check for state and local government programs and nonprofits that offer aid. Try these resources:
U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
PNC Bank can trace its history back to 1852 and the Pittsburgh Trust and Savings Co. Today, PNC Bank is the seventh-largest bank in the U.S., and it features a wide range of consumer and business banking services. Among its suite of products, PNC offers personal, unsecured installment loans up to $35,000. Applicants are considered based on satisfactory credit history, ability to repay and income.
Axos Bank is a digital bank founded in July 2000 with one product, a basic checking account. The San Diego-based bank has since focused on providing innovative products and solutions, including personal loans, to customers nationwide. Potential borrowers can prequalify online with no credit damage and obtain personalized loan options and rates.
Upgrade offers access to personal loans, the Upgrade card with a personal line of credit, rewards checking, and credit monitoring and educational tools. Founded in 2017 in San Francisco, the firm also has operations offices in Chicago, Phoenix and Montreal.
LendingUSA was founded in 2015 to be a lending solution for merchants. LendingUSA provides point-of-sale customer financing through more than 10,000 merchant partners in various sectors including medical services, pet services, funeral services and consumer services.
Rocket Loans offers personal loans to qualified borrowers in all 50 states. These loans are designed for people with fair to excellent credit who need to borrow up to $45,000 for debt consolidation, home improvements, medical expenses and business or other expenses.
Founded in 2005 and based in San Carlos, California, Oportun originates unsecured personal loans of up to $12,000 in 11 states. Loans are available in 30 additional states through Oportun’s partnership with Pathward, formerly known as MetaBank. The lender has no credit history requirement, making its loans an option for consumers with no credit or limited credit. In addition to unsecured personal loans, the lender offers secured personal loans to borrowers in Arizona, California, Florida, New Jersey and Texas.
LendingClub connects borrowers and investors through its online marketplace. LendingClub originated on Facebook and evolved into an extensive peer-to-peer lender, though it no longer offers peer-to-peer loans. Borrowers in all U.S. states can apply for $1,000 to $40,000 loans with LendingClub.
Chicago-based Avant has lent more than $6.5 billion to borrowers since its 2012 founding. In partnership with WebBank, Avant offers secured and unsecured personal loans and a credit card. The online lender helps borrowers with fair to excellent credit, or average scores from 600 to 800.
LendingPoint is an online lender specializing in unsecured personal loans from $2,000 to $36,500 for borrowers with fair credit. The Georgia-based lender issues loans with annual percentage rates of 7.99% to 35.99% and repayment terms of two to six years to people in every state but Nevada or West Virginia. Funds may be available as soon as the next business day after the lender approves the loan and receives all documents.
FreedomPlus is an online lender affiliated with Freedom Financial Network offering personal loans from $5,000 to $50,000 and promising quick approval and disbursal. A prospective borrower can apply online and talk with a loan consultant. All loans available through FreedomPlus are made by New Jersey-based Cross River Bank.
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