Health insurance does not cover many elective medical procedures, which makes paying for the treatments challenging. You may need to borrow money to begin your treatment.
Patients with a bad credit history can choose between three forms of traditional medical procedure financing.
A creative fourth option has many advantages over traditional sources and simultaneously overcomes the biggest drawback.
- Three forms of traditional medical loans
- Financing loan that is interest-free and tax deductible
Medical Procedure Loans Bad Credit History
Medical procedure financing for people with bad credit history carries greater risks to the lender. Each procedure may result in disability. Disability leads to lost income, which leads to poor repayment performance. However, four conventional loans do exist for people with a poor credit.
Apply for a medical loan with high approval rates after evaluating your options.
Four Loan Types
Choose between four types of traditional medical procedure loans for a bad credit history.
- Personal loans with higher interest rates
- Installment loan that allows you to borrow up to $2,000.
- Payday loan that provides high approval rates for bad credit.
- Title loan of up to $25,000 if you own a car.
Medical Procedure Considerations
Before taking out a medical procedure loan with bad credit, consider the probability of disability, and the expected lost income. Otherwise, your poor history may get even worse. Some treatments are benign and the patient is back to work the next day while others require major surgery, longer recovery periods, or downstream consequences.
Cosmetic and Plastic Surgery
Cosmetic surgery has advanced rapidly allowing for recovery times under three weeks for breast augmentation and implants. Lost income is not significant unless the plastic surgery patient has a strenuous job, or complications arise.
Health insurance often covers weight-loss surgery, which is the ideal form of financing. There may be criteria for who qualifies and when.
The criteria may include body mass index in conjunction with specific conditions: sleep apnea, coronary heart disease, hypertension, or type 2 diabetes. If you meet these criteria, your health plan may cover several forms of bariatric surgery including gastric bypass, gastric sleeve, and lap band. If you do not you may have to pay for the procedure yourself.
Most gastric bypass surgeries are done using a laparoscope and require up to five weeks for recovery. Healing takes longer with an open surgery. Infections and other complications may arise, which could extend your recovery period.
Make certain you factor in, at least, five weeks of lost income when considering loans for weight loss surgery.
Infertility treatments indirectly lead to lost income. The procedures themselves rarely cause the patient to miss any significant time from work, but a successful outcome often does. Most women take an unpaid maternity leave that lasts six or eight weeks.
Vasectomy and tubal ligation reversal surgery are intended to result in mom leaving work to recover from childbirth.
In Vitro Fertilization (IVF) is associated with a high multiple birth rate. Multiple pregnancies are often high risk and deliver early. There may be extended lost income prior to delivery, and after birth to care for a sick preemie at home.
Other Common Procedures
Most people needing to borrow money to pay for dental work, orthodontia, or hearing aids have less concern about lost income. Loans to pay for these medical procedures are less risky to the lender.
Medical Credit Cards
Have you applied for a medical credit card, and the bank denied your application because you have a bad credit history? Lenders tout the high approval rates for these cards, but not every person seeking medical treatment automatically qualifies.
Try using the open to buy on your existing credit cards. The open to buy is the difference between the limit, and the outstanding balance. Otherwise, pursue the other options outlined on this page.
Unsecured Medical Financing Bad Credit
A Flexible Spending Account (FSA) may be an ideal unsecured medical financing for people with a bad credit history. In fact, it has so many advantages that even the most qualified borrowers should use this funding source. This is how it works. Using your FSA requires no credit check, is interest-free, and tax deductible as well.
- You make an annual election of up to $2,500 during your employer’s open enrollment period.
- Your spouse does the same if needed.
- You schedule your elective procedure during the first month of the plan year.
- One hundred percent of any qualified expense is reimbursable when occurred.
No Credit Check
You get your unsecured medical financing without a credit check. Your employer does not pull your consumer report or look at your generic risk score.
All employees willing to participate can take advantage. People with a poor payment history can elect to participate and are guaranteed a 100% approval rate.
If both spouses have access to an FSA at work, they can borrow up to $5,000 annually.
After reimbursement for your qualified medical procedure at the beginning of the plan year, you then have the remainder of the year to contribute into the account via payroll deduction. Your contributions do not vary, regardless of when reimbursement occurs.
Give yourself interest-free unsecured medical financing by contributing to your FSA.
The problem with most traditional forms of medical financing is they are not tax deductible. Most of these arrangements are unsecured loans, which do not receive favorable tax treatment.
Your FSA medical loan is tax deductible – making it the ultimate form of financial assistance. You contribute into the account using pre-tax payroll deductions, which is better than getting a tax deduction in multiple ways.
- Pre-tax elections provide first dollar tax savings. There are no deduction thresholds to meet before realizing any tax savings. You save money on taxes with every dollar you contribute and spend.
- Pre-tax elections also reduce your reported W-2 earnings, which reduces the amount of FICA taxes paid.
If you have a bad credit history and need financial assistance for an elective medical procedure, your employer’s flexible spending account is the way to go. You will not find better terms anywhere.
If you become disabled, you may fall behind on your payments into the account. However, it will never be reported or negatively affect your credit rating.
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