Updated
May 30, 2023 Health care is expensive in the U.S. Over 40% of Americans carry debt from medical or dental procedures. One option for this type of financing is a medical loan. A few companies offer financing specific to medical expenses, but most lenders provide personal loans borrowers can use for any purpose. Whether you have health-related bills that aren’t covered by insurance or want an elective procedure, getting a medical expense loan can help you repay those costs over time.
We’ve researched the best medical loans for all kinds of borrowers, including excellent, good, fair, and thin credit applicants.
In this guide:
- Best medical loans
- Pros and cons of medical loans
- Should you take out a medical loan?
- What can I use a medical loan for?
- How to choose a medical loan
- How to apply for a medical loan
- Alternatives
- FAQ
Best medical loans
When evaluating loans for medical procedures, focus on lenders who work with borrowers in your credit score range. Your bank or credit card company may offer free access to your score, or you can sign up for a free credit score service that gives you an estimate.
The most common credit scoring model lenders use is FICO, which ranges from 300 to 850. Here are the credit score ranges and how they’re categorized so you know where you fall.
| Credit category | Score range |
| Exceptional | 800 – 850 |
| Very good | 740 – 749 |
| Good | 670 – 739 |
| Fair | 580 – 669 |
| Poor | 300 – 579 |
Best for excellent credit: LightStream
Editorial rating: 4.8 out of 5
- Loan amounts range from $5,000 to $100,000
- No origination fees
- Rate Beat feature lowers interest rate by 0.10% compared to any better loan offer
LightStream offers unsecured personal loans for borrowers with solid credit scores. You’ll also need stable income and low debt levels to qualify for a new loan.
LightStream offers a medical financing loan. If you qualify, you don’t need to worry about any origination fees from LightStream, so you know you’ll get your full loan amount.
- Credit score category: Good to excellent
- Soft credit pull to check rates? No
- Deposit time: As fast as same day
- Origination fee: None
- Late fee: None
- Rates (APR): 8.49% – 24.49%
- Repayment terms: 24 – 144 months
Best for good credit: SoFi
Editorial rating: 5 out of 5
- No fees required
- Unemployment protection lets you modify payments if you lose your job
- Get rate quotes in 60 seconds
SoFi offers personal loans you can use for medical expenses or any other purchases you need to finance. In addition to good credit, qualified borrowers will have higher income levels and lower debt-to-income ratios.
If you choose SoFi for a medical procedure loan or other health expenses, you’ll enjoy its unique unemployment protection feature. Not only can you get your monthly payment modified if you lose your job, but you’ll get job placement assistance to help you find your professional footing.
- Credit score category: Good to excellent
- Soft credit pull to check rates? Yes
- Deposit time: As fast as same day
- Origination fee: 0% to 6%
- Late fee: None
- Interest rates (APR): 7.99% – 23.43%
- Repayment terms: 24 – 84 months
Best for fair credit: Upgrade
Editorial rating: 4.9 out of 5
- Lower loan amounts available
- Origination fee lowers your total funds
- No prepayment penalties
You don’t need pristine credit to qualify for a personal medical loan with Upgrade. The minimum credit score is 560, so you may be eligible with negative entries on your credit report, such as late payments or medical bills in collections.
One downside is that Upgrade assesses an origination fee, which it deducts from your loan funds. You’ll pay interest on the total amount but get less depending on your origination fee.
- Credit score category: Bad to fair
- Soft credit pull to check rates? Yes
- Deposit time: Within one day of approval
- Origination fee: 1.85% – 9.99%
- Late fee: Up to $10
- Interest rates (APR): 8.49% – 35.99%
- Repayment terms: 24 – 84 months
Best for thin credit: Upstart
Editorial rating: 4.8 out of 5
- Quick funding times
- Approval model considers education and employment in addition to financial factors
- No fees for paying off loan early
Upstart provides bad-credit medical and other personal loans for $1,000 to $50,000. If you have a smaller amount of medical expenses to cover, you can apply with Upstart.
Upstart offers fewer customization options. You can choose to repay your loan over 36 months or 60 months. An origination fee lowers the cash you get.
- Credit score category: Fair or poor
- Soft credit pull to check rates? Yes
- Deposit time: As fast as one business day
- Origination fee: 0% – 8%
- Late fee: $15 or 5% of payment (whichever is greater)
- Interest rates (APR): 6.12% – 35.99%
- Repayment terms: 36 or 60 months
Pros and cons of medical loans
Pros
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Quick funding times for time-sensitive medical issues
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Potentially lower interest rates compared to credit cards
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More significant loan amounts to cover expensive medical bills
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Often no fees for paying off loan early. (Confirm with lender.)
Cons
-
Origination fees could lower loan amount
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May be difficult to qualify with bad credit and could result in high interest rates
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Increases debt load throughout the repayment period
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Quoted interest rate can increase with lower credit score.
Should you take out a medical loan?
Taking out medical loans for surgery or other health care needs is an important decision. Use a personal loan calculator to get a sense of your monthly payments with loans of different sizes.
Also, compare the size of the financial burden to how necessary the medical work is; for instance, an elective procedure such as plastic surgery may not be worth it if the loan payments would stretch your finances.
On the other hand, using a loan to pay off high-interest credit cards or other debt caused by medical bills could save you money if you qualify for a lower rate.
Speak with your tax accountant about whether your medical expenses are deductible on your tax return. Even if you finance them, major medical expenses may lower your annual tax bill.
What can I use a medical loan for?
People take out medical procedure loans for many reasons. Read our resources on funding each procedure by following the links below.
| Medical procedure |
| Tummy tuck |
| Plastic surgery or cosmetic surgery |
| Dental work |
| Addiction recovery treatment |
| In-vitro fertilization (IVF) |
| Hip replacement surgery |
| Breast augmentation |
How to choose a medical loan
Ready to pick the right medical loan for your needs? Start by focusing on lenders that offer prequalification. This lets you get personalized quotes for loan amounts, rates, and other terms without submitting a complete application.
Some lenders provide this information by performing a soft credit check, which doesn’t affect your credit score. Others may do a hard credit check, which pulls a full copy of your credit report. It can lower your credit score by a few points for a year and will be on your report for two years.
Here’s how our top lenders compare with credit checks during the prequalification stage:
| Lender | Soft credit check for prequalification? |
| LightStream | ❌ |
| SoFi | ✔️ |
| Upgrade | ✔️ |
| Upstart | ✔️ |
Once you have multiple offers to compare, look at the terms of conditions for each, including:
- Interest rate
- Origination or other fees
- Loan term
- Monthly payment amount
- Loan prepayment penalty, if applicable
How to apply for a medical loan
These are the steps to expect when taking out a medical loan.
- Figure out how much you’d like to borrow for your medical needs. Understanding your target loan amount prevents you from borrowing more than you need.
- See whether you prequalify. Pick several lenders, especially if they only perform a soft credit check.
- Compare offers. Look at the terms of every offer. Pick the best one based on cost, monthly payment, and overall user experience.
- Choose a lender and apply. Pick the best offer, and submit a complete application. You’ll likely need to submit financial documentation, including bank statements, pay stubs, and tax returns.
- Get approved and funded. Once you submit your application and get approved, your loan funds will be on their way. Every lender has its own delivery method, often deposited to your bank account. Any origination fees are deducted before you get the money.
Alternatives to a medical loan
Not sure whether a personal loan is the best choice to cover your medical expenses? Alternatives to consider include:
- Savings: If you have enough cash, consider using your savings to pay for some or all of your medical expenses. You can always take out a smaller loan to keep your monthly payments low.
- Credit card: A low-interest credit card is another option to cover medical costs. Some even come with a 0% introductory APR for a certain period.
- Home equity loan or line of credit: For more significant medical expenses, a home equity loan or line of credit lets you borrow money at a low rate. The downside is that your house is used as collateral for the loan.
FAQ
What can I use a medical loan for?
Personal loans can be used for any type of medical expense, including deductibles, dental work, elective procedures, fertility treatment, addiction recovery, and more. You can even use the money to cover living expenses while you recover.
What are the best bad-credit medical loans?
Upgrade and Upstart offer personal loans for borrowers with lower credit scores. Compare multiple options, including interest rates and origination fees, to keep the cost of borrowing as low as possible.
Can I use personal loans to pay medical bills?
As long as you meet the lender’s approval standards, you can use personal loan funds for anything you’d like, including medical bills.
Can I use a personal loan for any medical expenses?
Most lenders do not place limitations on how personal loan funds can be used. You’ll get the money as a lump sum in your bank account and can then spend it as you see fit.
Can I use personal loans for medical procedures?
Using a personal loan for medical procedures is OK, as long as your loan terms don’t state the funds must only be used for a specific nonmedical purpose.