Alternative Patient Financing Options for People with Bad Credit

Patient financing can help you cover the cost of an expensive medical treatment. The most common form of patient financing comes from the medical center where you were treated. There, it is possible to work out a plan to pay off bills over time instead of in one lump sum. However, this option is not always extended. If you need another source of funding, consider these options.

Secured Personal Loan

Since you already have bad credit, it will not be easy to locate financing at an affordable cost. In fact, you may be denied a number of traditional loan structures from banks and other lenders. To overcome this hurdle, try using collateral to make your loan option less risky for the lender. When you place collateral, like an automobile or home equity, you give the lender assurance you will not default on the loan. This makes it more possible to secure a loan. It also provides you a better opportunity at getting a loan with a lower interest rate than would otherwise be charged. Since you are essentially using debt to pay off other debt with this model, getting a lower interest rate will mitigate the financial problems you may experience.

High Risk Personal Loan

If you have no asset to place as collateral or are unwilling to take the risk, you can pursue a high risk personal loan. These types of loans are much harder to source, and you may need to seek alternative or high risk lenders to gain the financing. Because you are working with a high risk lender, have a bad credit score and do not have collateral, you can expect very high fees on this loan. There is no real method to reduce the fees except to take the loan out over a shorter time period. This will increase your monthly payments and is really only an option if you have an income high enough to support the increased fees each month. Those borrowers without assets and without a high income will find this financing option to be extremely challenging.

Revolving Credit Line

A third way to pay off emergency bills that makes sense for some people is to use a credit card or other form of revolving credit line. Credit lines can be either secured or unsecured; like installment loans, secured credit lines tend to be cheaper than unsecured credit lines. The major benefit to this option is the flexibility it offers you in making payments. Even if you are unable to make a large payment one month, you can still pay down the small amount required for a monthly maintenance fee. This is the best option for those people without collateral or a high income. However, you should be wary of failing to pay off the line successfully. Your interest will compound each month you leave a balance on the credit line. If you wait too long to pay off the debt,  you will end up owing far more than you did originally on the medical bills.

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