Best Medical Loans of 2024

The Bottom Line

Medical expenses can be difficult to handle, especially since they often come up unexpectedly. SoFi is our overall pick to help keep the cost of borrowing as low as possible if you need a personal loan to cover medical costs. It’s possible to get the lowest interest rates with the two credit unions on our list—PenFed and Patelco—if you have strong credit.

Those with poor credit status may qualify with Upstart. If you need cash fast, Upgrade can get you funds in one day, while BHG Money offers the highest loan amounts on the list. 

Guide to Choosing the Best Medical Loan

What Is a Medical Loan and How Does It Work?

A medical loan is a personal loan that is used to pay for medical expenses. These loans are typically unsecured personal loans, meaning no collateral is required, but lenders will look closely at your income and credit status to see if you qualify.

Where to Get a Medical Loan

Medical loans are usually offered by any lenders that offer personal loans, since personal loans can be used for almost any reason. Lenders include online lenders, traditional banks and credit unions, and loan marketplaces.

Each type of lender has its pros and cons. Banks and credit unions may offer a more personalized experience, for example, especially if you have an existing relationship. Online lenders are known for a streamlined application process and often have faster funding. Loan marketplaces let you shop several partner lenders for the best rate and term for your needs.

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How to Compare Medical Loans

If you decide a medical loan is the right choice, there are a few things you can do to smooth your repayment journey later. One of the biggest is checking your rate and loan options with at least three lenders, although more is better. 

• Annual percentage rate (APR): This gives you the total cost of the loan with all expenses included: the interest rate plus fees. 
• Term length: Longer-term loans lower your payments, but long terms mean you’ll be in debt for a longer time and pay more interest too. 
• Funding speed: You can get your money as soon as the same day with some lenders, while others may take several days or more. 
• Lender reputation: Reading reviews from actual customers and ratings from independent organizations like J.D. Power can give you a sense of how fairly the lender will treat you.  
• Repayment options: Ask what assistance programs the lender has if you run into problems going forward, such as being laid off or becoming disabled. For example, some lenders may reduce your interest rate or allow you to pause your payments for some time.
• Co-signer and co-applicant policies: If you prefer to apply for a medical loan with another person because you don’t think you’ll qualify on your own, check with your lenders of interest to see if they allow co-signers and co-applicants.

How to Qualify For and Apply For a Personal Loan

To qualify for a personal loan that will be used for medical expenses, lenders will look at a variety of factors. These can include: 

• Your age: Lenders cannot discriminate based on age. However, some states require that borrowers meet minimum age requirements before they can enter a legal financial contract with a financial lender.
• Legal residency: Just like age, lenders can't turn you down because of your national origin. They may ask you about your residency status to determine whether you can pay back the loan. Keep in mind that non-residents and non-citizens may still qualify, but it may be tougher to be approved.
• Income: Almost all lenders ask you for your income and employment information. This is to ensure that your source of income is enough to repay the loan. Some companies may have an income threshold before you can borrow.
• Debt-to-income (DTI) ratio: This ratio represents how much of your income goes to pay off your debts every month. As such, it helps lenders see how much of a risk you are if they approve you for a loan.
• Credit history and score: The majority of lenders use your credit history and credit score to qualify you for a loan. Although these factors don't make or break the decision, they may also influence your loan terms, amount, and interest rate.

If you think you meet the qualifications and wish to apply for a personal loan, most medical loans tend to follow the same general process to apply, get approved, and have your funds disbursed.

1. Get pre-qualified. If this option is available, take advantage. It’s an easy way to get a strong idea if you’ll qualify and for what rate without a hard credit check being performed. See if you can get pre-qualified offers from three or more lenders to compare.
2. Apply for a loan. Once you choose the best loan option from among your quotes, start the application process. Expect to upload any required documentation and fill out a basic questionnaire if you’re completing it online. Some lenders may require you to speak with an agent who will complete the application with you over the phone or in person.
3. Wait for approval. Approval for a loan can take anywhere from a few minutes to a couple of days depending on the lender and how complex your application details are. 
4. Accept the loan. Once approved, look over the loan agreement carefully. If everything looks agreeable, you can sign the loan. Your funds will be disbursed after that—anywhere from the same day or the next day to several business days later, depending on the lender.

According to Investopedia’s Personal Loan Borrower survey, when asked to select the top factors that determined where they applied for a loan, the lender’s website was cited in 48% of current borrower responses.

Pros & Cons of Medical Loans

Pros Explained

• Can cover medical expenses: Personal loans are lumps of cash that can be used for almost anything, including medical expenses.
• Can help build credit: Adding a personal loan to your credit profile will improve your credit mix, giving credit rating agencies another data point to rate your creditworthiness. On-time payments will help your payment history.
• Easy to get: Many borrowers can qualify for a personal loan, even if their credit isn’t the best, funds can be transferred quickly, and there are lots of lenders to choose from.

Cons Explained

• Can tighten your monthly budget: Adding a loan payment to an already burdened budget can stress your finances. Make sure your budget can handle the new expense.
• Interest expense can add up: Some lenders will let you stretch out payments as long as 84 months or seven years. The lengthy term makes monthly payments more manageable but adds to the overall cost of the loan.
• Interest rates can be high: Generally speaking, rates for personal loans are cheaper than rates for credit cards, but they can be steep, especially if your credit is weaker.

Alternatives to Medical Loans

A medical loan should never be your first choice when you get a bill in the mail. In some cases, you can reduce your bill without ever having to pay a cent. Here are some options to consider first:

• Charity care: Hospitals generally have need-based financial assistance programs available and you can reach out to the billing department for an application.
• Check your bill for errors: Over 50% of adults with healthcare debt have received a medical bill containing errors, and these are adequately fixed in about half of billing disputes. If you need help, medical billing advocates can do the work for you based on an hourly fee or percentage of the money they save you.
• Price-shop before your procedure: Call around or use a service like Healthcare Bluebook to find the cheapest provider for expensive procedures like knee replacements and sleep studies. If you have insurance, make sure the provider accepts it first.
• Negotiate your bill: The billing department with most healthcare providers may be willing to offer discounts or be open to negotiating lower rates or even interest-free payment plans.
• Seek community support: See if there are any groups in your area offering financial assistance in paying medical bills. To get help from a live person, try calling 211 or visiting 211.org.
• Crowdfund your bill: If you’re facing a truly horrendous bill and can generate a lot of support on social media, you may be able to pay for some or all of your bill using a site like GoFundMe.
• Borrow from friends or family: Try offering to write a formal contract, and only use this option if you’re sure you can repay the funds.
• Use a 0% APR credit card: If you can pay off the debt in a short amount of time, you might be a good candidate for a 0% APR credit card. Be careful of deferred-interest credit cards like CareCredit, however, which will back-charge you for all of the missed interest if you don’t pay it off within the specified amount of time. 

Why You Should Trust Us

Investopedia collected and analyzed hundreds of key data points from over 70 companies across three months to identify the most important factors for readers choosing a fair loan lending company.

We used this data to review each company for fees, repayment terms, income requirements, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best loans for those with fair credit since 2020.

How We Pick the Best Medical Loans

To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more.

To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:

• Loan costs (advertised APR, fees, and six other factors): 29.25%
• Loan terms (loan amount, repayment term, and three other factors): 22.25%
• Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
• Additional features (online application, pre-qualification, and eight other factors): 20%

Learn more about how we evaluated personal loans in our complete methodology.

Guide to Personal Loans

Learn more about personal loans:

• What is a personal loan?
• How do personal loans work?
• When are personal loans a good idea?
• How to get a personal loan
• How to apply for a personal loan
• How to use a personal loan
• Where to get a personal loan
• Personal loans vs credit cards
• Alternatives to personal loans
• Personal loan calculator
• Personal loans methodology