Unsecured Medical Loans: Comparing Brokers, Direct Lenders & Credit Cards

If used correctly, unsecured medical loans are a great option for financing part or all of your medical treatment. If used incorrectly, you could end up paying as much as 30% more per year than the original cost of the surgery.

This page will help you navigate the land mines and choose the option that’s right for you…

Advertisement

Overview
No Collateral Required, Higher Interest Rate

Overview: No Collateral Required, Higher Interest Rate

These types of medical loans are called "unsecured" not because they are unsafe for you but because you do not put up collateral to "secure" (back up) the loan in case of default.

After approving your application, your lender of choice will pay your doctor’s office directly and up-front for the entire amount of the surgery and after care. Your approval or denial and loan terms (length of loan, monthly payments, interest rate, minimum and maximum loan amount, etc.) will vary by lender and will be based on your credit score, employment status and income.

Because lenders charge an interest rate on unsecured medical loans, find out first whether your doctor’s practice will finance you directly. Getting a payment plan set up directly through your doctor is better for a few reasons:

  • Doctors typically charge little or no interest and often do not charge any additional fees
  • They are likely to be much more flexible than banks and credit card companies
  • Being late on a payment probably won’t effect your credit score

However, doctors aren’t in the business of lending money, so don’t be surprised if they won’t agree to offer direct financing.

IMPORTANT: Your doctor’s office may have a medical loan application ready to go, but this does not necessarily mean that the doctor’s office is the one financing you. Before signing anything, find out if the doctor’s office is actually the one financing your treatment. If they are using a third party, apply the information below to find out if there is a better deal elsewhere.

Process to Get Unsecured Loan
Know Your Credit Score; 5 Steps to Get A Loan

Process to Get Unsecured Loan: Know Your Credit Score; 5 Steps to Get A Loan

First, note that your credit report and score will affect both the types of unsecured medical loans available to you and the rate you are charged. Learning what your credit score is before applying for a loan and which factors (if any) are bringing down your score can help you figure out:

  • How likely you are to get approved (a score of 620 is typically the lowest score allowed in order to get approved for a regular loan)
  • How competitive your rate is likely to be (the higher your credit, the lower your rate)
  • Whether any items on your credit report are inaccurate or could be removed to improve your score (i.e. contact an old lender to dispute late payments or request their removal of a late payment – some lenders will allow a "goodwill" removal of a late payment on a one-time basis)

Here’s how unsecured medical loans should work…

  1. After negotiating the packaged deal with your surgeon (cost for treatment and follow-up care), they tell you that they cannot finance you directly but they either already work with or are willing to work with companies who do (if they don’t bring it up, ask). When you receive financing through a third party, the doctor usually gets paid in full before surgery, although some arrangements pay the surgeon back over time.
  2. Shop around for the best deal (we’ll help you figure this out below), and be sure to ask for enough credit to cover your entire treatment and aftercare.
  3. After you pick a broker/lender and a plan there are a few ways to apply for the loan, including completing the form at your doctor’s office or applying online (more on this below). You’ll typically receive a response from the lender within 30 minutes when applying online.
  4. Rates will be based on the term (length) of the loan and your credit score – the shorter the loan term and the better your credit, the lower your interest rate will be.
  5. You will continue making monthly payments until the loan is paid off.

Potential Downsides
5 Things To Keep In Mind

Potential Downsides: 5 Things To Keep In Mind

Before we review your unsecured medical loan options you should understand the potential hazards. If you have any questions, discuss them directly with the broker, lender or your doctor’s office…

Thinking About Surgery Outside the United States?

U.S.-based brokers and lenders will typically work with medical providers (doctors and hospitals) outside of the United States as long as the provider has a U.S. address or bank account.

See our Medical Tourism (Weight Loss Surgery Mexico & Abroad) page for more information about leaving the country for care.

  • Unsecured Loans Impact Your Credit – Late payments or a loan default could affect the interest rates you pay on future loans, insurance premiums or even your ability to get a job or rent a home. See the FTC’s web site for more info about credit. 
  • Weight Loss Center Conflict of Interest – If your doctor already partners with a lender or broker, don’t automatically assume it’s the best. You may get a better deal elsewhere, and your surgeon’s office only has to fill out a form or two to become affiliated with a different lender.

    Also ask your surgeon’s office whether any part of the financing arrangement they offer is controlled by them and up for negotiation. Some popular lenders leave some of the terms (i.e. additional fees) up to your doctor, so there may be room for negotiation.

    If your doctor is absolutely not willing to work with any other lenders, you should be suspicious – they may have a financial incentive to work with their chosen lender. The lender you choose shouldn’t matter to them. After all, they usually get paid up front regardless of which lender you use.

    If your surgeon’s deal is better than anything else you find, great! If not, they should understand your decision when you tell them what you were able to find elsewhere.

The Legality of Interest-Free & 0% Interest Rate Introductory Offers

The potentially deceptive use of interest-free and 0% financing has drawn the attention of the authorities.

Always pay extra attention to the fine print when considering these offers, which should read something like the following:

INITIAL DISCLOSURE 1: "Interest will be charged to your account from the purchase date if the balance is not paid in full within the promotion period of 12, 18 or 24 months or you make a late payment or you are otherwise in default."

INITIAL DISCLOSURE 2: "Interest will be charged to your account from the purchase date if the balance is not paid in full within the promotional period of XX months, if you make a late payment or you are otherwise in default."

SECONDARY DISCLOSURE EXAMPLE: "Check with your doctor to see which plans are available. Available for purchases of $300.00 or more. Interest will accrue during the promotional period at an APR of 24.75% to 27.99 % (depending on creditworthiness). Your actual APR will be stated at the time of purchase. A Penalty Rate of 29.99% will be applicable if your minimum payment is not received within 60 days of the due date if stated at the time of purchase. Due Date Change Fee $15. Minimum finance charge $.50. See your Purchase Acknowledgement and [LENDER NAME] Revolving Account Agreement for more information about this Promotion. Please read that material carefully."

  • Introductory & Interest-Free Offers and the Fine Print – You may be able to get a 0% interest rate to start out, but understand that it won’t last forever. Find out when the low interest rate expires (“introductory term”) and what the new interest rate will be when it does. Also ask if there is any way that the rate could go up before the end of the introductory term.

    For example, some lenders will increase your rate to as high as 30% if you are late on a payment. The interest rates will also increase after the introductory term is over.

    In addition, some introductory offers will exclude certain services from your doctor, leaving you with a higher rate for those services. Could it be better for you to pass on the “No Interest Plan” and jump right into their normal "fixed rate" plan?
  • Beware of the "minimum payment" offer on your monthly bills. If you only pay the minimum payment instead of the total monthly amount due, you will owe more when the introductory term expires (if there is one) and you could end up paying much more over the long run.

    Before moving forward, be sure you can afford to make the full "amount due" payment each month.
  • If you get denied – find out if the broker or lender will accept co-signers. Some allow either friends and family to attach their name to a loan while others only allow family members.

The fine print bottom line? Before financing bariatric surgery through any lender, get all of the details up front, ask questions about anything you don’t understand and choose the option with the lowest long-term costs (not the lowest monthly payment) that fits your budget.

Ready to review your options for unsecured medical loans?

We’re almost there. First, understand that there are two ways to go about this…

Brokers Vs. Lenders
Pros & Cons; 3 Step Budgeting Process

Brokers vs. Lenders: Pros & Cons; 3 Step Budgeting Process

The two primary avenues available when applying for unsecured medical loans (credit cards are usually more expensive):

  1. Directly through the lenders
  2. Through a broker who shops multiple lenders for you and presents you with the best deal they can find

Here are the pros and cons of each…

Pros
Pros
Cons
Cons
 
Unsecured Medical Loans Direct through Lenders
Pros
Eliminates additional fees of a “middle man” which could be anywhere from $100 to $3,000 or more over the term of your contract.
Cons
There is no competition, so you’re stuck with whatever terms and options that particular lender offers.
 
Unsecured Medical Loans through Brokers
Pros

You have an expert working for you who could have access to a better deal than you can get by going direct. The savings they find may offset their fees.

Saves you time by doing the legwork and research for you.
If you have credit problems, they may be able to still find financing for you.
Cons
They could be receiving incentives to recommend one lender over another (to help avoid this, ask them to confirm in writing the number of lenders they went to along with the deals they found from each).

As you can see, there are compelling reasons for each. You’re only going to know that you’re getting the best deal if you work with a broker AND take the time to work through individual lenders.

And don’t be afraid to negotiate. Sharing the deal you secured through a different lender may lead to a lower interest rate.

If you don’t want to take the time to contact multiple lenders or learn all of the financial ins and outs, use a broker. 

When choosing between multiple options (brokers should automatically give you the best deal they can find), run through this quick budgeting exercise to figure out which would be best for you:

  1. How much can you afford to pay per month? The more you can afford per month, the less you’ll pay over the long term. But whatever you do, don’t extend yourself so far that you won’t be able to make the monthly payments.
  2. Ask your broker or lender to map out in writing what your monthly payments will be under each option and what your total costs will be over the term of your loan. Assuming the interest rates are the same, the higher the monthly payment, the lower your total costs should be.
  3. As long as you’re sure you can afford the monthly payment, the option that costs the least over the long run (NOT the option with the lowest monthly payment) should be the one you choose.

Now that you know the facts and pitfalls, you’re ready to apply for a loan via your broker or lender of choice…

Comparison of Brokers
myMedicalLoan.com Vs Medical Financing Solutions

Comparison of Brokers: myMedicalLoan.com Vs Medical Financing Solutions

Following is a comparison of myMedicalLoan.com and Medical Financing Solutions. Each brings a unique approach, and both are able to shop multiple lenders to obtain unsecured medical loans on your behalf.

Company
Company
Minimum Credit Score
Minimum Credit Score
Co-signer allowed?
Co-signer allowed?
Available Credit
Available Credit
Number of Lenders Used
Number of Lenders Used
Broker Fee
Broker Fee
Broker Fee Payment Method
Broker Fee Payment Method
Lowest Interest Rate Available
Lowest Interest Rate Available
Response to: “Why should a patient choose you over another option?”
Response to: “Why should a patient choose you over another option?”
Links to applications
Links to applications
Minimum Credit Score
None – If patient does not meet their lender partners’ minimum credit requirements, patient can be enrolled in myMedicalLoan’s proprietary No Patient Left Behind program.*
Co-signer?
Yes
Available Credit
$1,500 to $25,000
Number of Lenders Used
10
Broker Fee
Between $300 and $1,200 – depends on loan amount and credit score.
Broker Fee Payment Method
Fees are built into the interest rate charged (wrapped into monthly payments).

Remember: brokers’ negotiated savings could offset their fees, so don’t make your decision solely on this factor.
Lowest Interest Rate Available
9.9%
Response to: “Why should a patient choose you over another option?”
“Because no patient is left behind. We’re in the business to find patients a loan no matter what.

A normal lender is just a single source company and patients must fit their criteria. With us, we’ll run your credit once and shop 10 lenders. If we can’t find a loan, patients are enrolled in our ‘No Patient Left Behind’ program (assuming your surgeon agrees to the terms*).”
Links to applications
Minimum Credit Score
620
Co-signer allowed?
Yes
Available Credit
$500 to $25,000 for credit scores over 680 $ 500 to $5,500 loan maximum for credit scores between 620 and 680
Number of Lenders Used
2
Broker Fee
$199
Broker Fee Payment Method
Fees are built into the interest rate charged (wrapped into monthly payments).

Remember: brokers’ negotiated savings could offset their fees, so don’t make your decision solely on this factor.
Lowest Interest Rate Available
9.9%
Response to: “Why should a patient choose you over another option?”
“We charge lower fees than our competition and work with two competitive banks – a local Kansas City Bank and a national bank.”

Comparison of Direct Lenders
careCredit Vs Reliance Medical Finance Vs Credit Medical Corp.

Comparison of Direct Lenders: careCredit Vs Reliance Medical Finance Vs Credit Medical Corp.

Following are the lenders that offer unsecured medical loans directly along with the contract details of each…

Company
Company
Plan Names
Plan Names
Terms
Terms
Interest Rate
Interest Rate
Fees & Penalties
Fees & Penalties
Require surgeon to participate in their network (if your surgeon does not already belong, you can refer them through each company’s web site. See application links below)
Require surgeon to participate in their network (if your surgeon does not already belong, you can refer them through each company’s web site. See application links below)
Pre-payment penalties (if you pay off the balance early)
Pre-payment penalties (if you pay off the balance early)
Links to fine print
Links to fine print
Links to applications
Links to applications
Company
Plan Names
2 Options: (1) No Interest (2) Low Fixed Interest
Terms
(1) 3, 6, 12 or 18 months (2) 24, 36, 48 or 60 months
Interest Rate
(1) 0%(2) 13.9%
Fees & Penalties
May be assessed if: (a) balance is not paid in full by end of term, (b) any minimum monthly payments are missed or (c) your account balance exceeds your credit limit.
Require surgeon to participate in their network (if your surgeon does not already belong, you can refer them through each company’s web site. See application links below)
Yes
Pre-payment penalties (if you pay off the balance early)
No
Links to fine print
Links to applications
Plan Names
(1) Interest Free (2) Extended Plans
Terms
(1) 3, 6 or 12 months (2) 12 to 60 months
Interest Rate
(1) 0%(2) starting at 6.9% (upper limit not available online)
Fees & Penalties
not available online
Require surgeon to participate in their network (if your surgeon does not already belong, you can refer them through each company’s web site. See application links below)
Yes
Pre-payment penalties (if you pay off the balance early)
No
Links to fine print
not available online
Links to applications
Company
Plan Names
Minimum credit line of $1,000; Plans are specific to each applicant
Terms
Depends
Interest Rate
Depends
Fees & Penalties
not available online
Require surgeon to participate in their network (if your surgeon does not already belong, you can refer them through each company’s web site. See application links below)
Yes
Pre-payment penalties (if you pay off the balance early)
No
Links to fine print
not available online

Regular Credit Cards
Could Have Better Rates Than Broker Or Individual Lenders

Regular Credit Cards: Could Have Better Rates Than Broker Or Individual Lenders

Don’t forget to look in your wallet!

After all is said and done and you have your broker or lender offer in hand, pull out your wallet and call your current credit card companies. What is the interest rate they are currently offering?  Are they willing to reduce it?

Explain to them what you are trying to do and how much you need to borrow. If you have good credit, they may bring the rate down as low as 12%.

If one of your credit cards has a better rate than your broker or individual lenders have provided, using it to pay your doctor may be the way to go.

However, keep your credit card limit in mind. The money you use to pay for your treatment will reduce the amount of credit you have available on that card for other expenses.

Ask A Top Bariatric Surgeon About Financing Weight Loss Surgery

Search By Location

SEARCH BY REGION

Advertisement

[ Last editorial review/modification of this page : 12/11/2016]

* Disclaimer: The information contained in this website is provided for general information purposes and your specific results may vary depending on a variety of circumstances. It is not intended as nor should be relied upon as medical advice. Rather, it is designed to support, not replace, the relationship that exists between a patient/site visitor and his/her existing physician(s). Before you use any of the information provided in the site, you should seek the advice of a qualified medical, dietary, fitness or other appropriate professional. Read More