Medical Loan Interest Rates

Medical Loan Interest Rates

A medical emergency can happen anywhere - at a concert, on a highway, on a city street, at the grocery store, or while at home – and can cause enormous and unexpected strain on your finances. Hospital bills for major medical emergencies can run into lakhs of rupees, and could be well impossible to pay at short notice.

Few people are prepared to deal with the financial requirements of a medical situation – let alone go through the emotional trauma. If you do not have an emergency fund for such situations, then you could consider getting a medical loan to help you stay afloat in such a crisis.

What is a ‘medical loan'?

If you are in an urgent need for funds to cater towards a medical emergency, you could apply for a medical loan, which is essentially offered under the banner of personal loans. There are various benefits to applying for a personal  loan for medical expenses. It is quick and easy to avail if you have a credible credit history and have a good relationship with your lender.

Most banks offer medical loans under the category of personal loans. It is similar to a personal loan in all aspects. A medical loan can be used for medical purposes such as hospitalization, treatment, post-operative care, therapy and so on.

The downside to a medical loan could be the high interest rates, since the loan in unsecured and the lender wants to safeguard against default. It could range anywhere from 11% to as high as 30% per annum or even more depending on various factors including the lender's polices. There are various banks and other financial institutions which offer personal loans. The interest rate on a medical loan is dependent on several factors such as your employment status, your income, your credit history, stability of your employment, etc.  

Features of a ‘Medical' Loan:

•    Quick and hassle-free

•    Minimal documentation

•    Quick same day loans with some lenders like HDFC, ICICI, Axis Bank etc.

•    Collateral-free and guarantor-free

Tips to Avail the Best Medical Loan Interest Rates

Following are some tips to avail the best interest rate on a medical loan:

•    If you are new to credit, apply for a score builder product and build your credit history – this will facilitate faster processing of a loan when you are in need of it.

•    Maintain a good credit history by paying all your dues on time without missing a single payment

•    Do not ever default on a loan

•    Do not apply for a loan with many lenders simultaneously – this will indicate that you are credit hungry and will negatively impact your credit score