Medical Loan

What is a Medical Loan?

A Medical Loan is a type of personal loan that provides financial coverage against medical costs that may arise if you encounter a medical emergency. An individual may use Medical Loans to pay for various types of medical expenses. This may include hospitalization bills, prescription bills, surgeries, bypass surgery, chemotherapy, and other medical treatments.

A rising health care cost leaves no choice but to seek alternative methods of funding medical care. The reason for this is also due to the ridiculous restrictions on health insurance coverage. A health insurance policy is one way to assist with financing medical expenses, but for certain procedures it may be best to consider a medical loan.

Medical emergencies can occur at any time, as life is unpredictable. A personal loan is the best way to resolve such a situation. Due to rising medical costs, it can become difficult for an individual to manage financing for the treatment that he or she or a family member requires. The medical insurance policy may not be sufficient to cover the cost of treatment in case of a serious illness. In such situations, obtaining a personal loan to cover medical expenses would be a wise decision. The process of getting a Medical Loan in India is fast, convenient and hassle-free.

You may need funds to cope with an injury or require urgent medical procedures, or you might require funds to provide the best healthcare to your loved ones. In any event, a Medical Loan can be of great assistance in such circumstances.

The Process of Getting a Medical Loan:

There are a variety of lenders offering medical loans. The application process is the same as it is for any type of loan. However, depending on the lender, they may be more flexible regarding the credit score requirements, or previous credit history than others.

Online Application-

The majority of lenders are turning to online channels as a way to let prospective borrowers apply for loans of any type. When you have decided on which lender you will apply to, you can apply for the loan online through the lender’s website.

Upon arriving at the medical loan page, you will need to click on the link that says ‘Apply Online’, which will lead to a new web page. During this process, you will be required to fill out an online application form, wherein you may be required to provide a few personal details such as your name, date of birth, mobile number, city of residence, and net monthly salary. You will need to submit the required documents with the online application once you have filled out all the details.

Offline Application-

If you intend to apply for the loan through offline channels, you will need to visit the lender’s branch closest to you and submit the required documents along with the application form.

The moment you submit your application using any of the listed above modes, you need to wait for further communication from the lender. In terms of further steps, you will be notified via the provided email ID or via WhatsApp or SMS, or you could even get a call. Generally, the disbursement of medical loans is fast and easy without much complication.

Compare Interest Rates –

It is evident that there are considerable differences in the interest charges charged by financial institutions and banks when it comes to a Personal Loan for medical expenses. The interest rate may vary from 10% per annum to 13% per annum. You should always make sure you compare all the interest rates before choosing which institution you are going to borrow from.

Other Charges –

The other charges may include processing fees, foreclosure charges, or late EMI payments, for example. All of these topics are discussed or informed to the borrower during the application process for a medical loan.

Documents that need to be submitted –

While applying for a medical, some of the important documents must be submitted (even electronically) in addition to your application. Medical loans are often provided to customers with very little documentation by some of the most prominent lenders on the market. Various institutions require different types of documents for medical loans, so the exact documents required by lending institutions may vary. It is possible to find out the lists of documents that must be submitted by visiting the official website of the lending institution or by enquiring with their officials. Anyhow, here are some of the documents which are crucial to processing a loan application:

  • Identity Proof of the borrower;
  • Address Proof of the borrower;
  • Income Proof of the borrower (Payslip or Form 16 or IT return);
  • Two Passport size photographs;

Repayment Plan –

In terms of repayment, the loan can be repaid easily through equated monthly installments (EMIs). Based on the loan amount and the term of the loan, you pay a defined amount each month. If you need more time, you can opt for a five-year term.

Credit Score –

Your credit score will play a big part in determining the interest rate that you pay. The bank or finance company will probably make it easier for you to negotiate a good deal if you have a good credit score.

Advantages of a Medical Loan:

More people are losing their savings to medical expenses and procedures due to the rising costs of healthcare. It is a more sensible choice to opt for a Medical Loan. Thus, the advantages of taking out a medical loan are:

  • During a medical emergency, this can be useful in helping to afford the large costs associated with medical care.
  • Having the funds available sooner is much better than waiting for insurance to determine coverage.
  • There is no requirement for collateral unsecured medical loans.
  • Credit utilization ratios are not affected by medical loans.
  • It may be better for you to finance through a medical loan than through your healthcare provider in some circumstances.
  • Utilize your medical loan money to pay for additional medical expenses (such as living expenses during your recovery and treatment).

Frequently Asked Questions (FAQ’s) – Medical Loan

In India, interest rates on a Medical Loan typically ranges between 10% to 20%. Thus, an average interest rate on a Medical Loan is 15%. It is advisable to discuss with the lender on this particular topic while applying for a Medical Loan.
The maximum loan amount varies depending on a variety of factors such as the borrower's income, repayment capacity, credit history, and credit rating. The amount of Medical Loans offered by most lenders ranges from Rs.10,000 to Rs.25 lakhs. The loan amount may, however, exceed this range depending upon the factors outlined above.
Yes, you have the option to foreclose / prepay your Medical Loan and save on interest. In addition, lenders can charge a prepayment fee of up to 6% of the outstanding loan principal amount if you decide to pay off your loan before its term is completed.
Any of the following ways can be used to apply for a Medical Loan:a)You can apply for a Medical Loan online by checking and comparing the options provided by online loan platforms.b)You may also visit the prospective lender's branch office and submit a properly completed loan application form, along with the necessary documentation, to apply for a Medical Loan.
The following documents must be submitted in order to apply for a Medical Loan:a.)Two passport-sized photos.b.)A Medical Loan application form must be duly completed by the applicant.c.)Identity Proof (copy of Passport/Voter ID card/Driving license/Aadhaar).d.)Address Proof of the borrower (copy of Passport/Voter ID card/Driving license/Aadhaar).e.)Last 3 months Bank Statement (Bank Passbook).f.)Two latest salary slips/latest Form 16
Basically, Medical Loans are a form of personal loan. You should view your Medical Loan as a type of personal loan that is used to finance your medical bill as a result of emergency medical treatments.
It is true that each borrower takes the loan for a specific purpose, the amount that gets approved may differ from one another depending on a number of factors.
Your loan amount that is ultimately approved or denied will depend on a variety of factors, including your age, your net monthly income, your employment status (term of employment, hire ability, etc.), your CIBIL credit score, your current EMI payments, and in general, your ability to repay.
There are many banks and non-banking financial companies that offer Medical Loans in India. To name a few like Punjab National Bank, ICICI Bank, State Bank of India, Citibank, IDBI Bank, Kotak Mahindra, HDFC Bank, Bank of Baroda, Capital First, Tata Capital, Axis Bank, etc.
The age of the applicant for a Medical Loan must fall within the range of 21 to 60 years at the time of loan application.
Not at all. A Medical Loan does not qualify for tax savings in any way, unlike a home loan. But the case is different for Medical Insurance Premiums. Under Section 80D, you are allowed to claim a tax deduction of up to Rs 25,000 per financial year on medical insurance premiums. This limit applies to the premium paid towards health insurance purchased for you, your spouse, and your dependent children
As soon as the loan is approved, you will receive the funds in your account. Depending on the bank or NBFC, some banks or NBFCs might take as many as three hours, while others may require a full day.
A flexible repayment plan is available for paying back the Medical Loan. There are several options available to you. You can go for EMI (easy monthly instalments). If you choose the easy EMI option, you can authorise the bank to take a direct debit from your account via an ECS (electronic clearing system) mandate or you may even choose to make payments by check.
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