Financing

Secured Medical Loans – Pros & Cons

Jeffrey A. Quinlan

Last Updated:  

Secured medical loans:

  • Can be used to finance all or part of your procedure, or whatever insurance does not cover
  • Usually require a minimum credit score of 620
  • Are loans from a bank or credit union that you back with some form of collateral. If you don’t pay the loan back, the lender can take ownership of the collateral you use
  • Most commonly use your home as collateral, but lenders may allow other assets to be used
  • Can be obtained through brokers or direct lenders (banks)

Read and click the sections below for everything you need to know getting a secured weight loss surgery loan.

TABLE OF CONTENTS

Click on any of the topics below to jump directly to that section

  1. Secured Vs. Unsecured Loans
  2. Types of Collateral
  3. 3 Loan Avenues
  4. Broker Options
  5. Lender Options
  6. Find a Weight Loss Surgeon
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01.

Benefits of Secured Vs. Unsecured Loans

SECTION SUMMARY:

  • Secured loans have a lower interest rate
  • Secured loans offer longer terms (up to 10+ years), so lower monthly payments
  • Secured loans offer larger loan amounts
  • Secured loans are easier to obtain (assuming you have proper collateral)

First, note that your credit report and score will affect both the types of 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)

Click here to go to freecreditscore.com to obtain your updated credit score and report and to determine which factors are affecting your score.

The glaring difference between secured and unsecured medical loans is the use of collateral, which is required for secured loans. With unsecured loans, you provide no collateral.

Before moving forward with any kind of loan, understand all of your financing options and the fine print.

Whether or not your loan is secured, the lender will come after your assets if you default on your loan.

The collateral makes loansless risky for the lender. If you default, the lender will have a much easier time getting some or all of its money back since it can take ownership of your property to offset their losses.

There are also several other important differences resulting from the risk offset by your collateral (we’ll get into the various forms of collateral in the next section):

  • Secured loans generally have a lower interest rate than unsecured loans (all else being equal). However, your interest rate will still be based on your credit score, income and loan terms.
  • Secured loans typically allow much longer terms up to 10 years or more, while unsecured loans usually have terms of 5 years or less. Choosing a longer-term secured loan will reduce your monthly payment, but it will also erode the cost-saving benefits of the lower secured loan interest rate.
  • Secured loans may allow you to obtain larger loan amounts depending on the value of your collateral (most commonly your home). Unsecured loans typically cap out around $25,000, while secured loans can be obtained for much larger amounts.
  • Secured loans may be easier to obtain if you have a poor credit score.

However, secured loans have a two main potential downsides…

  • Your home or other valuable property could be taken from you if you can’t pay off your loan.
  • There’s lots of paperwork since secured loans usually involve refinancing your home.
  • They can take longer to arrange and fund given the complexity of the contracts. Unsecured loans typically take about 1 week to fund while secured loans can take as long as 30 days or more.

So which is right for you?

Generally speaking, patients seeking medical loans of a smaller amount (under $15,000) go for the simplicity of unsecured medical loans.

If you own a home, have equity and are looking for a loan greater than $15,000 you may want to consider a secured loan…

02.

6 Types of Collateral

SECTION SUMMARY:

  • Home (most common)
  • Land
  • Car, motorcycle, or other automobile
  • Boat
  • Certificate of Deposit (CD)
  • Cash investments

By far the most commonly accepted form of collateral for secured medical loans is your home (also called a mortgage loan).

If you own your home and have equity built up, a home equity line of credit (HELOC) can sometimes be taken out for up to 90% of your home’s value. It is usually only possible if you have at least 10 to 20% equity built up.

While many banks won’t accept other forms of collateral for unsecured medical loans, it may be worth asking. Other forms could include:

  • Land
  • Car, motorcycle or other automobile
  • Boat
  • Certificates of Deposit (CD’s)
  • Cash investments

If you don’t have home equity or do not own any of the other assets above, see our Unsecured Medical Loans page for more information about that kind of loan.

If you do own one of these assets, click the section below to learn how to apply for a secured weight loss surgery loan.

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03.

Comparing Brokers & Lenders

SECTION SUMMARY:

  • Brokers are “middle men” that can help you find a lender or get a better deal
  • Lenders are the institutions that lend you the money
  • There are pros and cons to each
  • Apply for a loan using both avenues, then choose the best deal

As with unsecured medical loans, there are two primary ways that you can apply for a secured medical loan:

  1. Directly through a lender/bank
  2. Through a broker who shops multiple lenders/banks on your behalf

Tap here to see a chart of the advantages and disadvantages of each

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 Unsecured Medical Loans Direct through LendersUnsecured Medical Loans through Brokers
Additional broker feesNoYes ($100 to $3,000+ over term of contract)
Who must spend time to find best deal?YouBroker
Help finding options with low creditNo additional helpWill help find a deal
Ulterior motives?NoPossilbe (may be receiving incentives to recommend one lender over another – ask them to share all of the deals they find in writing rather than only presenting the “best” option)
Do you already have access to some/all of the funds?NoNo

So which is better, using a broker or going direct to a lender?

It depends.

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 elsewhere may lead to more favorable loan terms. At a minimum, contact your local bank to see what kind of deals they can offer.

If you don’t want to take the time to contact multiple lenders or if you’re uncomfortable with all of the financial ins and outs of comparing offers, use a broker. 

04.

Broker Options

SECTION SUMMARY:

  • myMedicalLoan.com
  • Medical Financing Solutions
  • United Medical Credit

myMedicalLoan.com and Medical Financing Solutions are two of the most popular medical loan brokers, and each offers competitive financing for both secured and unsecured medical loans.

Tap here for a chart comparison of available Broker Options

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CompanymyMedical­Loan.comMedical Financing SolutionsUnited Medical Credit
Minimum Credit ScoreNone – If patient does not meet their lender partners’ minimum credit requirements, patient can be enrolled in myMedicalLoan’s proprietary No Patient Left Behind program.*620None
Co-signer allowed?YesYesYes
Available Credit$1,500 to $25,0002Not disclosed
Broker FeeBetween $300 and $1,200 – depends on loan amount and credit score.$199Only disclosed after submitting application
Broker Fee Payment MethodFees 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.
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.
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 Available9.90%9.90%Not disclosed
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*).”		“We charge lower fees than our competition and work with two competitive banks – a local Kansas City Bank and a national bank.”“We offer financing options to individuals with good, sub-par and no credit… apply with a co-signer to strengthen your application. No matter what kind of treatment you need or what kind of financial situation you’re in, we want to help you finance your healthcare procedures.”
Links to applicationsmyMedicalLoan applicationMedical Financing Solutions applicationUnited Medical Credit Application
*myMedicalLoan’s No Patient Left Behind Program: Patient must show proof of employment and pay 1/2 of the the total amount due to the surgeon up front. myMedicalLoan then pays the balance to the surgeon in monthly installments as they receive your payments. Surgeon must agree to this arrangement and to discount their total fee by 15%. myMedicalLoan will contact your surgeon on your behalf to establish the loan.

Disclaimers: Above terms and information are subject to change. Confirm with broker and lender before proceeding. Bariatric Surgery Source is not responsible for interactions with any external company.

Any plans that include “No Interest” or “0% Interest”” provisions cannot legally use these terms without appropriate disclosures. . In addition to other disclosures, all information (including their marketing materials) should include something similar to the following: “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” or “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.” For more information, click here.
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05.

Lender Options

SECTION SUMMARY:

  • There are 5 primary lender companies

Following are the lenders that offer unsecured medical loans:

  • CareCredit
  • Lending Tree
  • Prosper Lending
  • Reliance Medical Finance
  • Credit Medical Corp. (Canada Only)

Each lender will have a unique contract with varying conditions. Tap here for a chart comparison of available Lender Options

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CompanyCareCreditLending TreeProsper LendingReliance Medical FinanceCredit Medical Corp. (Canada)
Plan Names2 Options: (1) No Interest (2) Low Fixed Interest1 Option: Low Interest Rate1 Option: Low Interest Rate(1) Interest Free (2) Extended PlansMinimum credit line of $1,000; Plans are specific to each applicant
Terms(1) 3, 6, 12 or 18 months (2) 24, 36, 48 or 60 monthsMultiple3 or 5 years(1) 3, 6 or 12 months (2) 12 to 60 monthsDepends
Interest Rate(1) 0%(2) 13.9%DependsDepends(1) 0% (2) starting at 6.9% (upper limit not available online)Depends
Fees & PenaltiesMay 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.Not available onlineNot available onlineNot available onlineNot 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)YesNoNo, but additional offers may be available through surgeonYesYes
Pre-payment penalties (if you pay off the balance early)NoDependsNoNoNo
Links to fine printCareCredit fine printLending Tree fine printProsper fine printnot available onlinenot available online
Links to applicationsCareCredit fine printLending Tree fine printProsper fine printReliance Medical Finance applicationCredit Medical Corp. application (Canada)
CitiBank’s Citi Health Card may also be an option, but their terms and arrangements are specific to each surgeon’s office. If your surgeon does not already belong to their network, it may be easier to choose one of the above options instead.

Disclaimer: Above terms and information are subject to change. Confirm with broker and lender before proceeding. Bariatric Surgery Source is not responsible for interactions with any external company.

Any plans that include “No Interest” or “0% Interest”” provisions cannot legally use these terms without appropriate disclosures. In addition to other disclosures, all information (including their marketing materials) should include something similar to the following: “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” or “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.” For more information, click here.
06.

Find a Weight Loss Surgeon

SECTION SUMMARY:

  • You can ask for a free insurance check /seminar /webinar /cost quote
  • You can schedule a phone or in-person consultation
TOOLS
FIND A SURGEON
DO YOU QUALIFY?
CHECK MY INSURANCE
WEIGHT LOSS ESTIMATOR
COST COMPARE
Apply for Loan (Ad)
Tax
Write-Offs
RECOVERY TIMELINES
PROCEDURE SUMMARIES
COMPARE PROCEDURES
Best Procedure Quiz
HEALTH BENEFITS

Find a Bariatric Surgeon

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Find a Bariatric Surgeon

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Do You Qualify for a Bariatric Procedure?

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Do You Qualify for a Bariatric Procedure?

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Do You Qualify for a Bariatric Procedure?

Patients who qualify for bariatric surgery usually:

  • Are at least 80 lbs (36 kg) overweight
  • Are between 18 and 75 years old
  • Have a history of failed weight loss attempts (e.g., failed diets)
  • Thoroughly understand that the procedure is just a tool; long-term success requires significant diet and lifestyle changes

The minimum bariatric surgery qualifications include:

  • A body mass index (BMI) of 40 or more
  • OR a BMI between 30 and 39.9 with a serious obesity-related health problem like diabetes, high blood pressure, sleep apnea, high cholesterol, joint problems, or others
  • OR a BMI of 30 to 40 with or without health issues for the gastric balloon procedure

To calculate your BMI, enter your height and weight into the tool, then click the “Calculate BMI” button.

Click here to learn more
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Check My Insurance Tool

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Check My Insurance Tool

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Check My Insurance Tool

Bariatric surgery insurance coverage varies by insurance policy:

Individual/Family Plans & Small Group Plans – Coverage varies by state; coverage is required by the Affordable Care Act in some states

Large Group Plans – Coverage depends on whether your employer has chosen to add it to your policy

Medicare and Medicaid – Bariatric surgery is covered

If your policy covers it and you meet the qualification requirements, your plan will likely include 4 procedures:

  • Gastric sleeve
  • Gastric bypass
  • LAP-BAND®
  • Duodenal switch

Your surgeon may be able to get partial coverage for the other procedures.

Use the tool to find out if your insurance covers bariatric surgery.

Click here to learn more
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Bariatric Surgery Weight Loss Estimator Tool

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Bariatric Surgery Weight Loss Estimator Tool

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Bariatric Surgery Weight Loss Calculator

You will start losing weight fast after any bariatric surgery procedure, but the total amount lost varies based on:

  • The procedure you choose
  • How closely you follow your doctor’s instructions

Enter your information into the tool to get an idea about how much weight you’ll lose after each procedure.

Click here to learn more

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Bariatric Procedure Cost Compare Tool

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Bariatric Procedure Cost Compare Tool

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Bariatric Procedure Cost Compare Tool

Your out-of-pocket bariatric surgery cost can range anywhere from $0 to $20,000 or more depending on several factors, including:

Whether your insurance covers it – many insurances (including Medicare, Medicaid, and many individual/family and employer-provided policies) cover the majority of costs for gastric sleeve, gastric bypass, LAP-BAND®, and duodenal switch. The other types of bariatric surgery are less likely to be covered, although you may be able to get insurance to pay for some of the costs. Tap the “With Insurance” button in the tool to see average out-of-pocket costs per procedure after insurance pays. See our Insurance Tool to find out if your plan covers it.

Which procedure you choose – if insurance won’t pay, costs range anywhere from $8,000 to $20,000+, depending on the procedure. Tap the “Without Insurance” button in the tool to compare the national average self-pay costs for each procedure. (NOTE: Some surgeons offer each procedure for as low as half of the national average).

How competitive your surgeon and hospital fees are – there is often a substantial difference in costs between different doctors and hospitals, even within the same town.

Whether you qualify for tax write-offs – Bariatric surgery is tax deductible, which can have a big impact on the total cost of surgery. You can deduct medical expenses if your out-of-pocket costs are more than 10% of your adjusted gross income. See our Tax Tool to find out if your bariatric procedure will be tax deductible.

How you choose to pay for your procedure – If insurance covers it, you’ll only be responsible for any copays, deductibles, and coinsurance required by your specific plan. If you pay for the procedure without insurance, total costs will depend on how you pay. For example, your surgeon may offer a discount if you pay the full amount up front, and you can make the costs more affordable by applying for bariatric surgery financing.

Click here to learn more
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LOAN ESTIMATOR TOOL

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LOAN ESTIMATOR TOOL

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Bariatric Surgery Tax Write-Off Calculator

Weight loss surgery is tax deductible, which can have a big impact on the total cost of surgery. You can deduct medical expenses if the costs are more than 10% of your adjusted gross income.

Use the tool to find out if you qualify for a tax deduction.

To receive the deductions, you’ll need to complete Schedule A of the IRS Form 1040. You’ll also need to save your medical bills and payment statements as proof. Money in one of the following special savings accounts (or even your IRA) may also be a way to pay for part of surgery tax-free:

  • Health Savings Account (HSA)
  • Archer Medical Savings Account (Archer MSA)
  • Health Reimbursement Account (HRA)
  • Flexible Spending Account (FSA)
Click here to learn more
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Bariatric Surgery Tax Write-Off Tool

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Bariatric Surgery Tax Write-Off Tool

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Bariatric Surgery Tax Write-Off Calculator

Weight loss surgery is tax deductible, which can have a big impact on the total cost of surgery. You can deduct medical expenses if the costs are more than 10% of your adjusted gross income.

Use the tool to find out if you qualify for a tax deduction

To receive the deductions, you’ll need to complete Schedule A of the IRS Form 1040. You’ll also need to save your medical bills and payment statements as proof.

Money in one of the following special savings accounts (or even your IRA) may also be a way to pay for part of surgery tax-free:

  • Health Savings Account (HSA)
  • Archer Medical Savings Account (Archer MSA)
  • Health Reimbursement Account (HRA)
  • Flexible Spending Account (FSA)
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Bariatric Surgery Recovery Timeline Tool

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Bariatric Surgery Recovery Timeline Tool

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Bariatric Surgery Recovery Timeline Tool

Bariatric surgery recovery varies by procedure. Here are the ranges:

  • Timeline Range: from 3 days to 6 weeks to full recovery
    • Hospital Stay: from outpatient (return home same-day) to 3 days
    • Back to Work: from 3 days to 3 weeks
  • Pain Range: from mild discomfort to manageable with medication
  • Diet Range: from no restrictions to slow transition from clear liquids to solid foods
  • Activity Range: from no restrictions to slow transition back to regular activity and exercise

Use the tool to learn more about each stage of recovery.

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Bariatric Procedure Summaries

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Below is a brief explanation of how each bariatric surgery procedure works. Tap the icons for more information.

Bariatric Procedure Summaries

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Below is a brief explanation of how each bariatric surgery procedure works. Tap the icons for more information.

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Bariatric Procedure Comparison Tool

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Bariatric Procedure Comparison Tool

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Bariatric Procedure Comparison Tool

There are 6 types of bariatric surgery (also called “weight loss surgery”) available, including:

  • Gastric Sleeve – feel less hungry & full sooner while eating
  • Gastric Bypass – feel full sooner while eating & absorb fewer minerals
  • Duodenal Switch – feel less hungry & full sooner while eating, absorb fewer calories and minerals
  • LAP-BAND® – feel full sooner while eating
  • Gastric Balloon – temporarily feel full sooner while eating (balloon removed after 6 months)
  • AspireAssist – drain a portion of stomach contents after eating

Use the tool to compare each procedure.

Click here to learn more
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Bariatric Surgery Quiz: Learn Your Top 2 Procedures

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Bariatric Surgery Quiz: Learn Your Top 2 Procedures

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Bariatric Surgery Quiz: Learn Your Top 2 Procedures

The best weight loss surgery options for you depend on:

  • How much weight you want to lose
  • Your current age, weight, health issues, habits, and lifestyle
  • Your expectations for life after surgery
  • Whether you want a reversible procedure
  • What “trade-offs” you are willing to make

Take the quiz to find out which two procedures are best for you and why.

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Bariatric Surgery Health Benefits Tool (Gastric Sleeve)

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Bariatric Surgery Health Benefits Tool (Gastric Sleeve)

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Bariatric Surgery Health Benefits Tool

Bariatric surgery “cures” or significantly improves many obesity-related health conditions, including:

  • Diabetes
  • Sleep apnea
  • Hypertension
  • Joint issues
  • … and many others

Select your health conditions in the tool, then click the Submit button to find out the impact a procedure like gastric sleeve can have.

Click here to learn more
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* Disclaimers: Content: 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. Advertising: Bariatric Surgery Source, LLC has entered into referral and advertising arrangements with certain medical practices, original equipment manufacturers, and financial companies under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partners and/or submit information. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Read More

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