5 Best Medical Loans in 2022
Medical loans can be used to pay for emergency or planned procedures. Here’s where to find medical loans plus other ways to finance medical expenses.
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A medical loan is an unsecured personal loan that covers health care costs. They can be used to consolidate existing medical debt, cover emergency or planned medical procedures like dental work 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.
Here's a list of the best lenders offering medical loans:
SoFi: Best for medical loans for low rates.
LightStream: Best for overall medical loans.
Upstart: Best for medical loans for thin credit.
LendingClub: Best for medical loans for co-signers.
Universal Credit: Best for medical loans for bad credit.
A medical loan is an unsecured personal loan that covers health care costs. They can be used to consolidate existing medical debt, cover emergency or planned medical procedures like dental work 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.
Here's a list of the best lenders offering medical loans:
SoFi: Best for medical loans for low rates.
LightStream: Best for overall medical loans.
Upstart: Best for medical loans for thin credit.
LendingClub: Best for medical loans for co-signers.
Universal Credit: Best for medical loans for bad credit.
5 Best Medical Loans in 2022 From Our Partners
Lender | NerdWallet Rating | Est. APR | Loan amount | Min. credit score | Learn More |
---|---|---|---|---|---|
![]() SoFi Get rate on SoFi's website | Best for Medical loans for low rates | 6.99- | $5,000- | 680 | Get rate on SoFi's website |
LendingClub Get rate on LendingClub's website | Best for Medical loans for joint loans | 6.34- | $1,000- | 600 | Get rate on LendingClub's website |
LightStream Get rate on LightStream's website | Best for Overall medical loans | 4.99- | $5,000- | 660 | Get rate on LightStream's website |
Upstart Get rate on Upstart's website | Best for Medical loans for thin credit | 5.40- | $1,000- | None | Get rate on Upstart's website |
Universal Credit Get rate on Universal Credit's website | Best for Medical loans for bad credit | 8.93- | $1,000- | 560 | Get rate on Universal Credit's website |
Our pick for
Medical loans for low rates
Our pick for
Medical loans for joint loans
Our pick for
Overall medical loans
Our pick for
Medical loans for thin credit
Our pick for
Medical loans for bad credit
How to compare medical loans
Below are key factors to consider when selecting the best medical loan.
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 about 6% to 36%. You need strong credit to get the lowest rates.
Fixed or variable rates. Most personal loans have fixed rates (interest and payments stay the same), rather than variable (interest 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.
» MORE: Find an unsecured personal loan
Origination fee. Some lenders charge one-time origination fees to cover the cost of processing the loan. The fee typically ranges from 1% to 10% of the loan amount and is included in the APR calculation.
Most lenders subtract the origination fee from the loan proceeds. A $5,000 loan with an origination fee of 3% would cost $150, leaving you with $4,850.
Loan term. The length of the repayment period affects your monthly payments. Most lenders offer loan terms in the range of two to five years. 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 health care costs, 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.
Is a medical loan right for you?
Before deciding on a medical loan, it’s important to determine if getting a loan for medical bills is the best decision for your financial situation.
A medical loan may be a good idea if:
You’re consolidating existing medical debt. If you have high-interest medical debt, a medical loan could help you consolidate debt at a lower rate. This makes it easier to manage monthly payments and pay your debt off faster.
You can afford the monthly payments. You should take a medical loan only if the installments fit comfortably in your monthly budget. Factors like the loan amount, loan terms and what APR you qualify for will determine your monthly payment.
A medical loan may not be a good idea if:
The APR is high. If you have fair or bad credit (689 FICO or lower), you may receive a high APR from a medical loan lender, which means you’ll pay more interest over the loan term. Let’s look at an example. A five-year, $5,000 loan with a 35.99% interest rate would result in you paying $5,837 in interest. This rate leads to a total cost of $10,837, which is over twice the loan amount. Financial experts generally advise that APRs should not exceed 36%.
You qualify for assistance. If you are experiencing economic hardship, you may qualify for a hardship plan from your health care provider or financial assistance from a charity organization or government programs. Look to these options first before taking out a loan.
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. Interest accrues during the term (6, 12, 18 or 24 months), but if you pay the principal balance in full by the end of the promotional period, you'll owe 0% in interest. For longer terms, the APR depends on the purchase amount and term length.
The card, issued through Synchrony bank, is accepted by over 250,000 health care providers. CareCredit can be used to cover medical events related to LASIK surgery, veterinary expenses, dentistry, cosmetic surgery and general health care. CareCredit’s approval and terms are based on your credit, and not all medical providers offer promotional financing options for health care costs.
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. You can also work with services like CoPatient that can locate mistakes on your medical bills and negotiate lower rates.
» MORE: Ways to pay medical debt
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.
Last updated on May 6, 2021
Methodology
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
To recap our selections...
NerdWallet's 5 Best Medical Loans in 2022
- SoFi: Best for Medical loans for low rates
- LendingClub: Best for Medical loans for joint loans
- LightStream: Best for Overall medical loans
- Upstart: Best for Medical loans for thin credit
- Universal Credit: Best for Medical loans for bad credit
Frequently asked questions
A medical loan is an unsecured personal loan that can be used to cover health care costs.
Medical loans can be used to pay for medical expenses like emergency room visits, checkups or dental work. Loans also cover medical procedures like plastic surgery, LASIK surgery, IVF or transgender surgery.
Credit score requirements depend on each lender. Check the lender’s website or give them a call to find out the minimum credit score they will accept.
You can get a medical loan with bad credit, but you may pay more interest. Avoid getting a loan with an interest rate above 36% or taking on monthly payments you cannot afford.