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5 Medical Loans for Health Care Expenses

Steve NicastroFebruary 25, 2020

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Medical loans can be used to refinance existing medical debt or to pay for emergency or planned procedures. Here’s where to find medical loans plus other ways to finance medical expenses.

Medical loans — which are unsecured personal loans applied toward medical expenses — can be used to consolidate existing medical debt, cover emergency or planned medical procedures like root canals or plastic surgery, or pay for high deductibles and out-of-network charges.

Medical loans are likely the most expensive way to cover your medical costs, and you must have excellent credit to qualify for the lowest rates offered by lenders. For this reason, medical loans should be considered only after you’ve exhausted other options, including payment plans and medical credit cards.

Summary of Medical Loans for Health Care Expenses

Our picks for

Medical loans

Avant

on Avant's website

Avant

Min. Credit Score

580

Est. APR

9.95 - 35.99%

Loan Amount

$2,000 - $35,000

on Avant's website


Min. Credit Score

580

Key facts

Avant's low starting rates make it a good option for borrowers with low credit scores and income.

Pros

  • Able to fund loans within one business day.

  • Soft credit check with pre-qualification.

  • Option to change your payment date.

Cons

  • Charges origination fee.

  • No option to include co-signer.

Qualifications

  • Minimum credit score of 580.

  • At least $20,000 in gross annual income.

Available Term Lengths

2 to 5 years

Fees

  • Administrative fee: Up to 4.75%.

  • Late fee: $25 (most states).

  • Unsuccessful payment fee: $15 (most states).

Disclaimer

A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. Minimum loan amounts may vary by state. If approved, the actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. An administration fee of up to 4.75% will be deducted from the loan proceeds. Avant branded credit products are issued by Webbank, member FDIC
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Lightstream

on LightStream's website

LightStream

Lightstream

Min. Credit Score

660

Est. APR

5.49 - 20.49%

Loan Amount

$5,000 - $100,000

on LightStream's website


Min. Credit Score

660

Key facts

LightStream targets strong-credit borrowers with no fees and low rates that vary based on loan purpose. It offers high borrowing amounts for financing costly medical procedures or consolidating medical debts.

Pros

  • No fees.

  • Rate discount for autopay.

  • Low starting rates.

Cons

  • Does not offer pre-qualification on its website.

  • Requires several years of credit history.

Qualifications

  • Minimum credit score of 660.

  • Enough income to pay existing debts and a new LightStream loan.

  • Maximum debt-to-income ratio varies depending on existing assets and the reason for the loan.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). Rate quote includes AutoPay discount. AutoPay discount is only available when selected prior to loan funding. To obtain a loan, you must complete an application on LightStream.com, which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $5,000 loan at 12.8% APR with a term of 3 years would result in 36 monthly payments of $168. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.
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SoFi

on SoFi's website

SoFi

Min. Credit Score

680

Est. APR

5.99 - 18.83%

Loan Amount

$5,000 - $100,000

on SoFi's website


Min. Credit Score

680

Key facts

SoFi is a strong option for good-credit consumers, offering high borrowing amounts, low rates, no fees, and flexible payments.

Pros

  • Soft credit check with pre-qualify.

  • Flexible payment options.

  • Offers member perks.

Cons

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Does not offer refinance options.

Qualifications

  • Minimum credit score: 680, but typically 700 or higher.

  • Minimum annual income: None; borrowers' average is over $100,000.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Fixed rates from 5.99% APR to 18.83% APR (with AutoPay). SoFi rate ranges are current as of August 27, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. 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, years of professional experience, income and other factors. See APR examples and terms. 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.
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Upstart

on Upstart's website

Upstart

Upstart

Min. Credit Score

600

Est. APR

8.69 - 35.99%

Loan Amount

$2,500 - $50,000

on Upstart's website


Min. Credit Score

600

Key facts

Upstart may be a good fit for borrowers who are new to credit, since the lender considers other factors, including education and employment, in the application process.

Pros

  • Accepts borrowers new to credit.

  • Fast funding.

Cons

  • Origination and late fees.

  • No secured or co-sign option.

Qualifications

  • Minimum credit score: 600.

  • Minimum credit history: None.

  • Minimum annual income: $12,000.

  • Max debt-to-income ratio: 45%.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 0% - 8%.

  • Late fee: 5% of past due amount or $15, whichever is greater.

Disclaimer

1)This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. 2) § 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. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,100. The minimum loan amount in GA is $3,100. 3) ‡ The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. 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.
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Lending Club
See my rates

on NerdWallet's secure website

LendingClub

Lending Club

Min. Credit Score

600

Est. APR

10.68 - 35.89%

Loan Amount

$1,000 - $40,000

See my rates

on NerdWallet's secure website


Min. Credit Score

600

Key facts

LendingClub is a pioneer of peer-to-peer lending and an option for fair- to good-credit borrowers.

Pros

  • Offers direct payment to creditors with debt consolidation loans.

  • Joint loan option.

  • Soft credit check with pre-qualification.

Cons

  • Charges origination fee and late fees.

  • Does not offer mobile app to manage your loan.

Qualifications

  • Minimum credit score of 600. LendingClub uses FICO 8 credit scoring model.

  • Minimum credit history of three years.

  • Debt-to-income ratio of less than 40% for single applications, 35% combined for joint applicants.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2% to 6%

  • Late fee: Greater of $15 or 5% of payment after 15-day grace period.

Disclaimer

*All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long-term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: 595 Market St suite 200 San Francisco Ca 94105. **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between Jan. 1, 2018, and July 20, 2018. The time it will take to fund your loan may vary.
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Compare medical loans

Here are some key factors to consider when shopping for medical loans.

Annual percentage rate. A loan’s APR represents the true annual cost of borrowing, including interest and fees, helping you make an apples-to-apples cost comparison between loans. APRs on personal loans range from 6% to 36%. You’ll need strong credit to get the lowest rates.

Fixed or variable rates. The loan’s rate can either be fixed (interest costs and payments stay the same), or variable (interest costs and payments can rise or fall, depending on market rates). A fixed-rate loan comes with peace of mind that your payments won’t rise over the loan term.

Origination fee. Some lenders charge one-time origination fees to cover the cost of processing the loan. The fee typically ranges from 1% to 6% and is included in the APR calculation.

Most lenders subtract the origination fee from the loan proceeds; a $10,000 loan with a 3% origination fee would cost $300, leaving you with $9,700.

Loan term. The repayment period length affects your monthly payments. A longer repayment term results in lower monthly payments, but higher total interest paid over the life of the loan. Aim for a loan term with payments that fit within your budget. Use our personal loan calculator to see estimated payments at different loan terms.

Speed. If you need fast funding to cover medical expenses, consider a lender with a quick application to funding process. Some online lenders can provide funding within a day or two, while others can provide funding within a week.

How to pre-qualify for a medical loan

Pre-qualifying for a medical loan with an online lender lets you see potential loan terms, including the loan’s interest rate, loan amount and payments. Take the steps to pre-qualify and compare offers to find the loan that gives you an amount you need and a payment you can afford.

Alternatives to medical loans

There may be better ways to finance a medical procedure or pay medical debt than through a personal loan.

Payment plans. Your best option may be to establish a payment plan with the medical provider and avoid paying interest on the debt if it’s repaid within the term, says Kari Jean Glosser, a financial advisor and partner at Abacus Wealth Partners in Santa Monica, California.

Some health care providers require a deposit followed by monthly payments; others may accept just monthly payments until the debt is repaid in full, says Glosser, who used a payment plan for her own dental surgery.

Ask your medical provider about any fees or charges associated with the payment plan, so you know the full cost of this option.

Medical credit cards. These are specialty credit cards available through many medical providers.

CareCredit is a specialty credit card that offers a short-term financing option at 0% interest if paid in full by the end of the term (6, 12, 18 or 24 months). For longer terms, the APR depends on the purchase amount and term length.

The card, issued through Synchrony bank, is accepted at over 200,000 health care providers. CareCredit’s approval and terms are based on your credit, and not all medical providers offer promotional financing options.

0% credit card. A 0% interest credit card is another option that can include a sign-up bonus and rewards. You’ll need strong credit to qualify, and you must pay off the debt in full before the promotional period expires or you'll pay high interest charges.

It’s best to dedicate a regular credit card for medical expenses only. Mixing medical debt with other purchases makes it harder to keep records for tax deductions or a health savings account, Glosser says.

Other options. If you’re facing hospital bills, a medical bill advocate can help spot potential errors and negotiate on your behalf to have your total bill reduced. Some medical providers may also offer hardship plans for low-income borrowers.

Last updated on February 25, 2020

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Medical Loans for Health Care Expenses