Medical loans

When it comes to borrowing money for medical purposes, the bank or lender won’t be all that concerned about why you are borrowing money; you could be using it for a renovation or to buy a boat. What they will be concerned about is your ability to pay back the loan amount.

You will generally have the option between a fixed or a variable-rate loan. A fixed interest rate loan means that for the duration of the loan period, your loan repayments will remain fixed. Many people prefer this option as it allows them to budget effectively.  With a variable-rate loan, your repayments could go up or down during your loan period. Generally, variable rate loans have flexible features like extra repayment and redraw facilities. These can be useful if you are able to make more than the minimum repayment so that you can pay off your loan sooner.  

You’ll notice that our table and all loans in our database have two sets of interest rates advertised, the interest rate and the comparison rate. The comparison rate combines the headline interest rate with any loan fees into a single rate. It’s a good idea to use this rate to compare loans between providers because often, some lenders that have low-interest rates could have higher fees, so by using the comparison rate, you are able to make a more informed choice.

Just be aware that the comparison rate advertised is worked out on a set criteria. If your loan amount or loan term is different to this, your comparison rate will be different to this rate, but the lender will be required to tell you what it will be. Also, you may find that you will get a different rate whether you're applying for a Melbourne personal loan or Sydney personal loan or somewhere else.

The great news is that with online applications and approvals, some personal loan providers can turn around your application and get your medical loan approved pretty quickly. Medical loans can be applied for online and conditional approval can be granted in as little as 60 seconds with official approval and funds often received within 24-48 hours. 

There is no way to be certain that you’ll be approved for a medical loan, and if you’ve had a chequered past when it comes to borrowing cash, it could be a little harder, or you may have to pay a premium when it comes to the interest rate on your loan. However, it certainly isn’t impossible, and there are even a few easy ways to improve your chances of being approved.

• Start small: Smaller loans are less of a risk for lenders and also require less of an income to service, so make sure you’re not blowing yourself out of the water by asking for too much cash unnecessarily.
• Show you’ll be able to meet repayments: Lenders will look upon your application more favourably if you’ve shown that you’re a steady saver by making regular deposits into a savings account, as it will show them that you’ll be able to meet your new loan repayments. This is especially important if you haven’t previously applied for credit in the form of a different personal loan or credit card.
• Keep on top of bills and payments: Even if you haven’t been so diligent in the past, make sure you keep your recent credit history as clean as possible. A missed repayment two years ago doesn’t look so bad when you’ve consistently made the last 18 months' worth of repayments on your credit card.

If you’ve got a home loan, you might be able to opt for a secured loan for your medical expenses. ‘Securing’ your loan means that you’re offering up an asset as security for the loan, and in return, providers will offer you a more competitive interest rate. But keep in mind that if you default on the loan, they could then seize the asset you’ve placed on the table.

If that isn’t an option for you or just not something you’re comfortable with, not to worry, you can always choose an unsecured personal loan.

Whether you’re after a facelift, some liposuction or in need of something a little more structural like a knee reconstruction or hip replacement, medical loans can help cover the costs for a range of procedures and surgeries. This includes elective surgery, which is when you go under the knife for non-essential procedures, like cosmetic or laser eye surgery. But you can also use a medical loan to pay for dental procedures as well as to help cover the costs of any essential surgeries - like an appendectomy if you suddenly fall victim to appendicitis. 

No, you can use medical loans for a host of health-related expenses, including travel costs for overseas procedures or to pay for a series of specialist appointments. Just bear in mind that if you do plan on fueling a trip overseas for a medical procedure with one of these loans, the money you receive in your bank account will be in Australian dollars. If that’s the case for you and you’re looking for a way to use that money overseas, head over to our travel money hub to find the perfect way to spend your money abroad.

When you apply for a personal loan, you’ll usually have to nominate what the money will be used for, and more often than not, medical expenses will be an option you’re given by the provider. Aside from that, there are very few restrictions on how you spend the money you’re approved for. One thing to keep in mind, however, is that you don’t want to be using a medical loan for everyday expenses - like groceries or utilities - as it’s a form of income that can dry up quickly, especially if you’re taking some time off work to recover from a big procedure or serious illness.

Medicare - Australia’s publicly funded form of healthcare - will definitely help cover the cost of a range of medical expenses, whether it be an unexpected few days at the hospital or an elective surgical procedure. But you’re at the mercy of the public health system, which often means lengthy waiting times for consultations and procedures.

For this reason, a lot of Australians choose a private health insurance provider to help cover their medical costs as well as provide them with a few added health perks like choosing a specific surgeon or hospital. But even then, medical costs can easily balloon beyond the caps and coverage levels provided by health insurance providers in Australia, which is where a medical loan can come in handy.

Generally speaking, medical loans are a good choice if you’re trying to fund a large, one-off medical expense that your budget can’t accommodate rather than any ongoing costs. This is because, eventually, the loan amount will run out, meaning you’ll have to find another way to stump up for your continuing medical expenses.

If you’re looking for a way to accommodate any ongoing health-related costs into your current budget, why not run a refresh using Mozo’s budget calculator? It will give you the option of adding in the cost and its frequency alongside all of your other expenses so that you can build a budget that works for you in the long-term