Medical loans

What is a medical loan?

A medical loan can cover the costs of both elective and necessary medical treatments and procedures, as well as the cost of specialist appointments, hospital expenses, medical equipment and even travel expenses and recovery time. Medical costs can be really expensive, and even with private health insurance, you may have to pay an excess, or worse, your procedure might not be covered at all. If you don’t have the funds you need, you can take out one of these loans to cover your bills.

As with a regular personal loan, a medical loan from a lender such as Pretty Penny Finance or MediPay may be offered with either a fixed or variable interest rate as well as flexible repayment options.

What can a medical loan be used for?

You can use a medical loan to cover any of the expenses associated with your medical treatment, such as the following:

• Medical or cosmetic surgeries. This includes any optional or elective surgeries as well as any procedures performed at a private clinic or hospital.
• Specialist or doctor appointments. If you need to regularly visit a specialist, you can get a medical loan to cover the cost of these appointments, regardless of whether they are covered by Medicare or your insurance.
• Medical treatments or medicine. You can also use a medical loan to purchase specific drugs, treatments or medicines.
• Hospital expenses. It can be expensive to stay in hospital, but you can use a medical loan to cover any of the costs that you incur as part of your stay. This could also include any specialised procedures you receive while in hospital, such as X-rays or MRIs.
• Personal medical equipment. If you require certain medical devices or equipment to help your recovery or to treat an ongoing medical issue, you can use a loan to cover the purchase costs.
• Travel expenses. If you need to travel to get medical treatment, the cost of travel and accommodation can also be covered by a loan.

You can use most personal loans for any worthwhile purpose, and this includes any medical treatments or their related costs. If you're unsure whether a particular cost can be covered by a medical loan, it may be worth contacting the lender directly.

How should I compare my medical loan options?

Medical loans have many of the same features as other personal loans, so it's a good idea to consider all of these before applying. These include the following:

• Fees. Most loans come with fees and medical loans are no different. Depending on the lender you go with, you may have to pay loan establishment fees or monthly fees as well as early repayment fees or redraw fees if these features are available.
• Interest rate. Check if the loan comes with a fixed or variable rate and if the rate is competitive compared to other personal loans. You should also always consider the comparison rate of the loan since this includes any fees or charges to show the true cost of the loan.
• Repayments. Lenders may also differ in how flexible they are with their repayments. Most lenders will offer you the option of making your repayments weekly, fortnightly or monthly, but they also may allow you to make additional repayments to help save you money in the long run.
• Loan amount. As medical costs can be quite steep, medical loans are usually for higher amounts than other loans. Some medical loans have quite high minimum loan amounts. Some are around $10,000, so make sure you won’t have to borrow more than you need.
• Loan terms. As the loan amount is generally higher for medical loans, the lender may offer you a longer period to pay it back. Check to see if you will be able to manage the repayments with the loan term that the lender sets.
• Restrictions. How flexible is the loan purpose? If you would like some additional funds for recovery time surrounding your medical procedure, you might want to ensure that the entirety of the loan is not required to be spent on the medical bills themselves. Most personal loans will be flexible when it comes to how the funds are used, but it's still wise to check, just in case.

Same-day personal loan funding

Treatments covered by medical loans

You can use a medical loan to cover pretty much any type of medical procedure. For more details on specific types of medical procedure loans, check out the below guides:

IVF treatments

Depending on how many treatments you get, IVF can cost tens of thousands of dollars. Find more information on IVF loans here.

Cosmetic surgery

Whether it's rhinoplasty, breast augmentation or reconstructive surgery, loans for cosmetic surgery are common in Australia.

Weight loss surgery

For borrowers looking to fund bariatric or other types of weight-loss surgery, check out our guide.

Dental loans

Whether it's cosmetic or necessary, dental procedures can cost a pretty penny. Find out more about loans for dentistry here.

For some Aussies, a line of credit is the only way they can afford their medical expenses. While it might seem easier to just whack it on the plastic, a personal loan can sometimes be the more affordable option, depending on your circumstances

Alanna Glenn
Lead publisher, Money

The pros and cons of medical loans

Frequently asked questions about medical loans

• How much does it cost?

  The cost of a medical loan will depend entirely on the types of loan you go for, the lender in question, your financial situation and the amount of funding you require.

  If you opt for a personal loan to cover your medical costs, you can get an estimate of your repayments with a personal loan calculator.

  If you opt for a payment plan with your clinic, the price will depend on the interest rates and fees charged by your clinic.

• How can I get a medical loan with bad credit?

  Having a poor credit history can negatively impact your chances of getting a loan, but it certainly doesn't make it impossible. If you have bad credit and you need to pay for medical bills that you otherwise cannot afford, there are a number of medical loans for bad credit that might be able to help:

  • Short term loans. If you have a bad credit history, you can usually still qualify for a short term loan. These loans are generally available up to $2,000, though you can find lenders that offer $5,000 or even $10,000 short term loans. Please be aware, however, that these loans have high fees and interest rates, and should be considered as a last resort.
  • Risk-based loan. Risk-based loans are also a viable option if you have previous defaults on your credit history. However, like short term loans, you may find that you only qualify for a lower amount or a shorter term, or that you are charged more than borrowers with good credit scores would be.
  • Secured loan. If you have bad credit but you offer an asset such as real estate, a vehicle or even valuable art/jewellery as security for a personal loan, you could potentially lower your rate and increase your chances of being approved.
  • Get a guarantor. If you have a friend or family member who is willing to be a guarantor for you, a guarantor personal loan could be an option. If you default on your loan repayments, a guarantor becomes responsible for the loan, meaning that less risk is posed to the lender.

• Can I get a medical loan if I'm self-employed?

  It is still entirely possible to get a medical loan if you're self-employed. However, providers may look at your finances more closely. This may mean that your application takes slightly longer than average.

  Some of the additional documentation that you may be required to provide if you are self-employed can include the following:

  • Company-specific information. If you own your own business, be prepared to provide information such as your company's ABN, address, etc.
  • Tax returns. Be prepared to show the last two years of your full personal and/or company tax returns. These will help prove any income you declare on your application.
  • Financial statements. These may include any profit/loss statements to also support the income that you declare.
  • Proof of rental income. If you have any income from rental properties, you can declare this with real estate statements or copies of your executed lease agreements.
  • Notice of Assessment. Make sure you have on hand your latest Notice of Assessment (NOA). Depending on the lender, you may need to provide your NOAs from the last two years.
  • Recent bank statements. This includes statements showing your savings and business transactions. It may also include statements showing any other outstanding loans or credit cards you have with other lenders.

• Should I take the finance offered by my clinic?

  Whether you opt for in-house financing from your clinic will depend on the type of finance that your clinic offers. Many clinics will offer an interest-free period on their treatment loans, usually somewhere between 6 and 12 months. After this initial period, however, a high interest rate is usually charged.

  If you want longer to repay, or if you want the confidence that your medical repayments will not dramatically increase after the introductory period, a personal loan might be a better option for paying for your treatment.

• Are there any interest-free medical loans in Australia?

  If you're looking for an option that doesn't break the bank, interest-free finance could help. There are two main forms of interest-free medical finance:

  Buy now pay later platforms

  Many clinics now accept payments from interest-free finance providers, such as a MediPlan from Zip Money. These providers could give you up to 24 months to pay off your medical bills, interest-free.

  Providers such as Zip can be used to pay for treatments, including medical, cosmetic, vision, dental, veterinarian and more.

  Things to be aware of with buy now pay later include:

  • Short/medium loan terms. Providers like Zip give you up to two years to repay your debt, so ensure that you are able to meet the repayments within this time frame.
  • Pays for treatments only. Interest-free finance providers pay for your treatment directly to the clinic, with no money paid to you. So, if you think you will require extra funds for your recovery time, you may still want to consider a loan.
  • Limited clinic options. Not every clinic will accept this option.
  • Fees. Fees may apply.

  No interest loans scheme (NILS)

  If you're a low-income earner, you may be able to qualify for an interest-free loan from NILS. These loans have terms of 12-18 months and have no fees or charges.

  However, applicants must meet the following criteria:

  • Have a Health Care Card or Pension Card
  • Earn less than $45,000 per year after tax ($60,000 for couples or people with dependants)
  • Have lived at their current or previous address for at least three months
  • Show a willingness and the capacity to repay the loan

• How long does it take to get approved for a medical loan?

  The amount of time it takes to be approved for a medical loan will depend on the lender and the type of loan you go for. Some loans might take a few days to qualify for, while some may take a few weeks. That being said, many lenders do offer next-day or same-day approval on medical/personal loans.

• How do I apply for a medical loan?

  If you’d like to apply for a personal loan to finance your medical expenses, you can compare your options using the comparison table below. If you find a suitable loan, you can then click the "Go to site" button to be taken to the lender's website to start your loan application. To apply, you’ll need to meet the following criteria:

  • Aged 18 or over
  • Be an Australian citizen or permanent resident
  • Be employed or receiving regular payments into your bank account

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Written by

Rebecca Pike

Senior writer

Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio

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