Medical Loans

Medical care can be painfully expensive. You can compare a range of loans with Savvy to help you cover the costs.

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, updated on July 4th, 2024       

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How does a medical expense loan work?

A medical expense loan is a normal personal loan, but for the main purpose of covering medical costs. Like all other personal loans, it requires you to apply for a set amount of credit and prove your eligibility. The lender will then assess your application and approve it if you meet their criteria. Once approved, your loan will be funded and you can use it to pay your medical bills. You will also be required to make regular repayments, as set out in your loan contract. 

Even though it's called a medical expense loan, though, you aren't necessarily locked into using it purely for medical reasons. As part of the loan application process, the lender will ask you why you need the money. It’s here that you'll need to indicate that you'll use the funds primarily (or at least partly) for medical expenses. Few lenders will want to see evidence of the medical expenses the loan will cover. This may be a bill from a doctor or hospital, or an estimate of your travel or recovery costs. This is rare and will usually only be applied if it's a large amount.  

What can I use a medical expense loan for?

A medical expense loan can be used to cover a wide range of healthcare costs. From surgery expenses to travel costsonce approved, you can put these funds toward almost any aspect of your healthcare. Some of the main things people use medical expense loans to pay for include: 

  • Surgical costs: While most life-saving surgeries will be at least partly covered by Medicare or your insurance, others will not be. Elective surgeries (like hip or knee replacements) will also involve significant out of pocket expenses. 
  • Cosmetic surgeryCosmetic procedures – like liposuction, facelifts, and tummy tucks – have become far more commonplace. Generally speaking, such procedures are quite expensive and will not be covered by insurance. 
  • Hospital costs: If you have private health insurance, many of the costs you incur in hospital will be covered. However, if you don’t have insurance, or you require any special tests, you will need to pay these expenses yourself. 
  • Dental treatment: From check ups to more major work, most insurers don’t cover non-critical dental procedures. However, a medical expense loan can help you keep your teeth healthy and looking their best. 
  • Medication, personal medical equipment, or at home care: While most of these things will be at least partly government subsidised, they can still be quite expensive. If you can’t afford to cover these costs yourself, a medical expense loan could make them more accessible. 
  • Travel and accommodation costs: Whether you need to see an interstate specialist or want to go overseas for your surgery, travel can be expensive. A medical expense loan can help with this, as well as any accommodation you require, including during recovery. 
  • Living expenses while off work: Depending on your condition and treatment, you may not be able to work – possibly for an extended period. If you are unable to take leave, a medical expenses loan could help you cover your costs during this time. 
  • Anything else: because it's a personal loan, you're not restricted to simply using it to cover medical costs. You can also use them to consolidate other outstanding debts, cover necessary home improvements and renovations and even help pay for your next holiday.

Can I take out a loan for laser eye surgery?

If you don't have 20/20 vision, the thought of correcting your eyesight and banishing the glasses forever may have crossed your mind. Also known as refractive surgery, laser eye surgery can be used to fix a range of sight problems such as short-sightedness (myopia), long-sightedness (hyperopia) and astigmatism, removing the need for glasses and contact lenses. Common types of laser eye surgery include PRK, LASIK and SMILE, the suitability of which depends on your specific eye condition, corneal thickness, lifestyle and preferences.

However, laser eye surgery doesn't come cheap. Prices for laser eye surgery in Australia vary depending on the procedure you have and where you are but can start from around $1,800 per eye for PRK and $2,600 for LASIK, up to about $5,000 per eye for more complex procedures involving lens implants. A personal loan can help you cover these costs upfront, giving you flexibility and peace of mind when booking your procedure. 

How do I choose a medical expense loan?

If you need help paying your medical costs, there are a few financing options available to you. The one that’s most suitable for your situation will depend on the cost and nature of your expenses. As such, when choosing a medical expense loan, you should start by thinking about the type of loan you want: 

  • Fixed or variable: You will need to decide whether you want a set interest rate or one that moves with the market. A fixed rate loan will mean your repayment amounts are set for the life of the loan. A variable personal loan usually provides more payment flexibility but could cost you more if interest rates increase. 
  • Secured or unsecured: Do you want to secure your loan against a major asset (e.g. your car)? This will usually make the loan easier to get and should mean a lower interest rate. However, these are far less common, as most lenders exclusively offer unsecured personal loans. These are quicker to process and can still come with affordable interest rates and useful features.
  • The loan features: Depending on your situation, there are a range of additional loan features you may want included. For example, you may want payment flexibility so you can pay off your loan early, without incurring extra fees. Conversely, you might want a redraw option on your loan, if you expect you will require access to additional funds. 
  • The loan term: You can choose how long you will have to repay the loan. Most lenders offer terms of between 1 and 7 years and your repayment will be calculated accordingly. However, while a longer loan term will mean small repayments, it will also cost you more in interest and fees. 
  • The type of lender: Borrowers are spoilt for choice these days, with a few different types of lenders offering medical expense loans. Maybe you want the security and service of a traditional bank or credit union (and don’t mind the higher fees), or maybe you just want the lowest interest rate possible, so are happy to go with an online lender. 

Once you know what you are looking for from your medical expense loan, you can shortlist suitable products. You can then compare these to find the one that offers the best deal. We recommend using the comparison rate for this, as it better indicates the total cost of the loan. 

While most lenders will promote their interest rate, this is only part of what you will have to pay. When you take out a medical expense loan, there are a range of additional fees that will be applied. These cover everything from the setting up of your loan contract to the ongoing administration of your account. 

As there is no set structure or limit on fees and interest rates, they will vary from lender to lender. Some will have a lower interest rate, but higher fees; others will have no fees, but charge more interest. This means that the interest rate alone will not tell you which loan offers the best deal for you. 

However, the comparison rate includes both interest and the most common fees in its calculation. As such, it’s a more accurate representation of what you will actually pay over the life of the loan. So, the most suitable loan with the lowest comparison rate should be the best one for you! 

How do I get a medical loan?

Applying for a personal loan for your medical treatment can be a straightforward process, involving just a few steps:

  1. Assess your eligibility: before you apply, you should ensure you meet the lender’s eligibility criteria. To take out a personal loan in Australia, you must be at least 18 years old and a citizen, permanent resident or, in some cases, the holder of an acceptable temporary visa. The lender will also have their own requirements relating to income, employment and credit score.
  2. Compare your options: it’s important to compare offers from different lenders to find one that best suits your situation, looking at things like interest rates, fees and repayment terms. Savvy’s free online comparison service can help you with your decision, allowing you to compare deals from dozens of lenders across the country in one place.
  3. Submit your application: once you have chosen a lender, it’s time to apply. In most cases you can apply quickly and easily online by completing an application form and providing supporting documentation such as photo ID, payslips and proof of address.
  4. Receive your funds: if your application is approved, the funds will be deposited in your bank account in as little as 24 hours ad typically within three business days. Remember that there is no grace period, so you will need to start making repayments on your personal loan straight away.

How else could I fund my medical treatment?

Many elective medical procedures are not available on Medicare, leaving you responsible for funding the procedure yourself. Personal loans are a convenient option, but you could also look at the following to cover your costs either fully or partly:

Health insurance: health insurance policies can help to cover the costs of medical treatment, though there will be limits on what is covered and how much you can claim. Check with your health insurance provider to see what your policy includes and what the specific terms and coverage limits are.  

Savings: if you are not in a rush, using your personal savings can be a straightforward way to cover the costs of medical treatment without going into debt and avoiding the additional costs of interest and fees associated with loans.

In-house payment plan: many private healthcare providers and clinics offer in-house payment plans or financing options directly through the clinic. These plans may allow you to spread the cost over several months or years, much like a personal loan, but it is important to check the terms and conditions to see if you can get a better deal elsewhere.

Types of personal loan

Why compare personal loans through Savvy?

The pros and cons of using a personal loan for medical expenses

PROS

All your money at once

Funded as a lump sum, so it's a strong option for large one-off expenses

Affordable rates and fees

Personal loan interest rates and fees are usually lower than other payment methods like credit cards 

Customise your loan term

You can choose your loan term – most lenders offer terms of 1–7 years 

Smaller repayments

The ability to lengthen your loan term and enjoy reduced interest rates and fees will reduce what you pay per instalment

CONS

The longer the loan, the more you pay

The total cost of the loan could be higher if your loan term is longer, which could result in you paying considerably more than the amount you borrowed 

Tough eligibility

Set eligibility criteria can make it hard for some applicants to secure a loan 

Not well suited to recurrent costs

Personal loans are less suitable for ongoing expenses as there may be the temptation to use funds for other purposes. 

Still not sure if a medical expense loan is right for you?

Who can apply for a medical expense loan?

As with most other personal loans, to be eligible for a medical expense loan, you need to be: 

  • An Australian Citizen or Permanent Resident 
  • At least 18 years old 
  • Receiving some form of income 
  • Able to show you can afford the repayments 
How much can I borrow on a medical expense loan?

Most lenders provide loans of between $2,000 and $75,000. However, you should only borrow the amount you actually require to cover your medical costs. 

Can I pay out my medical expense loan early?

Yes – most personal loan financiers, including those who we're partnered with, won't charge you for paying out your agreement early. However, some lenders may charge an extra fee for settling your loan ahead of schedule, so you should always ensure this isn't the case when comparing loans.

How long does it take for my medical expense loan funds to be processed?

Thanks to advances in application and lending technology, most loans can be processed, approved, and funded within just 24 hours. However, the speed will depend on the nature of your profile, so some may be faster and others slower

If you need funds urgently, the best thing you can do is make sure you’ve completed the loan application correctlyAs part of this, make sure you provide all the information and supporting documentation the lender requires upfront. This will mean they don’t have to come back to you for clarification and should speed up the approval process. 

Can I apply for a medical expense loan if I have bad credit?

While a good credit score (500+ for most lenders) helps, there are options if you have a poor credit history.  

Some lenders specialise in helping applicants with previous issues on their credit file and have more flexible eligibility requirements. However, you should be aware that these companies usually charge higher fees and interest to help cover their financial risk and these loans are usually limited to a maximum loan amount of $10,000 to $12,000. 

Can a medical expense loan be used to cover ongoing healthcare costs?

While the funds from a medical expense loan can be used to pay for ongoing care, this is not recommended. As the loan will be funded as a lump sum, it’s best put toward a larger one-off expense. If you require ongoing access to finance, a credit card or line of credit may be more suitable. 

I have private health insurance – can I still take out a medical expense loan?

Depending on the details of your policy, your private health insurance will cover some medical costs, but not all. Lenders understand this and usually provide loans for the expenses not covered by insurers. As such, it generally won’t matter to a lender if you have private health insurance. 

Can I get financing if I do my procedure in another country?

Yes – personal loans can be used however you like, so you can take them out to cover the cost of a surgery in another country. It is not uncommon for Australians to go overseas for procedures due to their lower costs, but remember that cheaper is not always better. Settling for the cheapest practitioner might save money but could possibly come with increased risks. It is vital that you check the accreditation of your practitioner to know that you will be getting a safe procedure that will not come with health risks.

What happens if I change my mind about surgery after getting the loan?

You are free to change your mind about undergoing an elective medical procedure or dental treatment even after you take out the loan. Taking out a loan is a completely separate arrangement and does not lock in any medical plans. However, you are still responsible for repaying the borrowed funds according to the loan agreement terms.

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