• A medical loan is a personal loan which provides you with the funds you need to receive medical treatment or undergo surgery. It can also help pay for other medical necessities, including equipment or medication.
  • This can be handy if your medical expenses are essential or urgent, or if your healthcare insurance will not cover all your medical costs. But keep in mind you’ll be charged interest and potentially a raft of fees.
  • Apart from the interest rate, keep an eye out for a medical loan’s upfront fees, ongoing fees, as well as other non-standard fees. The loan term will also affect the amount of interest you pay over time.
  • Make sure the application process is fast enough for you to receive the money you need to pay for your medical procedure when you need it.

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Learn more about personal loans

What are medical loans?

When hit with unexpected hospital bills or other medical costs, the right type of personal loan could be an option to meet your health needs. A medical loan is a personal loan which provides you with the funds you need to undergo medical procedures. It can also pay for other medical necessities, including equipment or medication.

None of us wants to face serious medical issues and a healthy lifestyle can help keep the doctor away. Yet there are times when you may face hefty medical expenses and your health insurance, or the public system may not cover all the costs.

Taking out a personal loan to cover your medical bill could help you receive the treatment you need when it's really necessary. Being in a road accident, for example, may lead to prolonged health care with operations and recuperation. It doesn't help your recovery if you're worried about how to pay for everything, so a personal loan for your medical procedure could be worth considering for some people.

Why do people use medical loans?

Healthcare insurance doesn't always cover you for all your medical needs at a particular time, and you should always check to see exactly what you are entitled to. You'll be covered for many things but, depending on your age and medical history, there may be some things that aren't covered.

And in some cases, health insurance may cover your accident or injury, but you may find yourself out of pocket covering the gap between how much the insurance provider is willing to cover and what the hospital is charging

Dental treatment, for example, can be expensive and if you have an emergency problem or need some long-term root canal work, you may have to make a significant contribution to the cost. This is where a medical bill loan can help take the financial pressure off. You’ll be able to pay back the costs with interest over time, but you’ll be able to receive the treatment you need without waiting for funding.

A personal loan can also help people facing longer-term hospital bills or post-accident cosmetic surgery, if that’s something you’re considering. Even in cases where cosmetic surgery is not deemed medically necessary, you could still potentially secure a personal loan. 

What are the main features of medical loans?

Just like there’s no such thing as a free lunch, no loan from a financial provider is ever free. Lenders make money from lending money to customers and that’s why it’s on you to look for the best deal. It is important to be very clear about the costs you will be incurring and how you will pay back the loan.

If you’re shopping around for a personal loan to cover your medical costs, check these features before you make a decision.

  • Interest rate – The lender may offer you a higher or lower rate depending on how much you want to borrow and your credit history. If you own assets, you could consider securing a loan with collateral for a lower interest rate. However, you do run the risk of having the asset seized if you default on your loan repayments. You may also want to compare whether a fixed or variable interest rate would better suit you.
  • Fees – Interest may be a lender’s main form of revenue, but the fees they charge could also be hefty. Look out for upfront fees, ongoing fees, as well as other non-standard fees. An example of a non-standard fee is break fees, which are charged if you pay off your debt earlier than the agreed loan term.
  • Loan term – Your loan repayments will be spread across the agreed loan term, which could range between one and seven years. The amount of interest you pay will depend on how long your loan term is.

What do you need to know about medical loans?

Good health is one of the most important things in life for most people. Securing the money you need for a medical procedure through a personal loan could work for you but is not necessarily a good option for everyone.

In some cases, a medical personal loan could provide you with the money and peace of mind you need to get better sooner or to get urgent procedures carried out swiftly.

That being said, make sure to check the turnaround times before you apply. If you are unable to receive the cash from the lender fast enough to pay for your medical procedure when you need it, there could be little point in going ahead with the loan.

It’s also important to only take out a loan you know you can afford. If you don’t make repayments or make late repayments, this could have an impact on your credit rating.

Consider using RateCity’s Personal Loan calculator to work out the regular repayments, so you know what to expect.

Frequently asked questions

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

Can you pay off a quick loan early?

Many lenders will allow you to make extra repayments onto a quick personal loan when you can afford them, or even exit the loan early, which can help reduce the total interest you are charged. Be sure to check your quick loan’s terms and conditions, as some lenders charge early exit fees for paying off a loan ahead of schedule.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.

If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.

Will comprehensive credit reporting change my credit score?

Comprehensive credit reporting may change your credit score, either positively or negatively, depending on an individual's situation.

Under comprehensive credit reporting, credit providers will share more information, both positive and negative, about how you and other Australians manage credit products. That means credit reporting bureaus will be able to make a more thorough assessment of everyone’s credit behaviour. That will lead to higher scores for some consumers and lower scores for others.

What do single parents need for a personal loan application?

Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of assets (e.g. car, home)
  • Details of liabilities (e.g. credit cards, other loans)
  • Loan amount
  • Loan term

Can students with no credit history get loans?

It is possible for students with no available history of borrowing or managing money to get a personal loan, though it may be more difficult as well as expensive than for borrowers with a good credit history.

Having no credit history means having no credit score. While many lenders may consider having no credit score to be better than having a bad credit score, they may still consider it riskier to lend to an unknown borrower and may charge higher interest rates or fees than to borrowers with good credit scores.

Is it hard to improve your credit score?

It can be hard to improve your credit score, as it usually requires sacrifice and discipline, but hard doesn’t necessarily mean complicated. Some simple ways you can give your credit score a boost include closing extra credit cards, reducing your credit card limit, pay off any loans and make loan repayments on time.

As a general rule, the lower your credit score, the more remedies you can apply and the greater the scope for improvement.

Can I get a $2000 loan on Centrelink?

If more than half of your income comes from Centrelink benefits, it may be more difficult to have a $2000 loan application approved. Many lenders will check if you can afford a loan’s repayments on the income from your job before they’ll approve an application, and many won’t count Centrelink payments when assessing your income for this purpose.

Some lenders may offer $2000 loans to borrowers on Centrelink – consider contacting potential lenders to check before applying.

What can I use a bad credit personal loan for?

Generally, bad credit personal loans can be used for the following purposes:

  • Debt consolidation
  • Paying bills
  • Buying vehicles
  • Moving expenses
  • Holidays
  • Weddings
  • Education

Some lenders restrict how their bad credit personal loans can be used as part of their commitment to responsible lending – be sure to check before applying.

What documentation is needed for a self-employed personal loan?

Personal loans may require a borrower to provide proof of identity, proof of residence, details of any other outstanding loans (including credit cards), details of assets they own (e.g. savings, car, property), and proof of income.

While borrowers in full-time or part-time employment can often provide payslips and similar documents to prove their income, self-employed borrowers may need to provide other documents, such as bank statements or tax returns, to demonstrate that their income can cover a loan’s repayments.

Can I get a $4000 personal loan if I’m unemployed or on Centrelink?

Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.

If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.

Which lenders offer bad credit personal loans?

Several dozen lenders offer bad credit personal loans in Australia. These are generally smaller lenders that aren’t household names.