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If you need help covering the cost of medical treatment, you may be able to get what’s called a medical loan.

A lot of lenders advertise medical loans as a separate product. But in my experience what they’re offering is the same as any other kind of personal loan.

You see, personal loans can be used for more or less any purpose.

This can come in particularly handy for medical procedures as there can be clinical as well as related costs to cover.

In this guide, I’ll explain how medical loans work. And I’ll share some tips for keeping your costs as low as possible.

1. The procedure isn’t covered by Medicare

If the procedure you are having carried out is not covered by Medicare (and you’re also not covered by private health insurance), a medical loan could help finance it.

For example, Medicare generally does not cover:

• Private hospital costs
• Elective cosmetic procedures
• Dental treatment
• Laser eye surgery
• Some medications
• Some types of home care

2. Private health insurance won’t cover the cost

This could simply be because you don’t have private health insurance.

Or your policy doesn’t cover a particular treatment. Even a very high level of private health insurance will have its limits.

3. You’re having the procedure done overseas

Likewise Medicare and private health insurance generally won’t cover you if you choose to travel overseas to have the procedure.

4. You don’t want to wait for the public system

What if the procedure you need is covered in the public system but there’s a long waiting list?

Taking out a medical loan and paying for private medical care could be an alternative.

5. There are large related costs to cover

The medical cost itself is just one aspect of funding a medical procedure. A medical loan could cover that plus the related costs, like travel, lost income and aftercare costs.

Understandably, getting the best medical treatment you can will be your priority.

But taking the time to find an appropriate medical loan that offers good value could make the finance process easier and less expensive.

Here’s what I usually recommend borrowers look at:

• Loan purpose: It’s worth confirming up front whether the lenders place any restrictions on what you can use your medical loan for.
• Borrowing amount: Likewise, make sure the lenders you’re considering offer loans of the right size for what you need.
• Interest rates: This will be the biggest cost of the finance. Try to get the lowest interest rate you’re eligible for.
• Loan term: Ideally look for a short repayment term. This will keep your interest costs down. The average personal loan term is just under three years.
• Repayments: Based on the loan amount, interest rate and loan term, you’ll be able to calculate your regular loan repayments. Can you afford these comfortably?
• Early repayment: Another way to reduce costs is making extra repayments on your medical loan if you can afford to. Look for loans that allow you to do this without penalty and don’t charge a fee if you repay the loan in full early. This can also make life easier if you want to do a personal loan refinance down the track.
• Fees: Medical loan fees are worth explaining in a bit more detail…

These are the basic requirements. Each lender will have its own way of assessing personal loan applications.

This boils down to establishing whether you are going to be able to repay the medical loan comfortably for the full term.

To do this lenders generally look at factors including:

• Your credit history and credit score (I recommend checking your credit score yourself first to ensure you’re in a good position to be approved)
• Your income
• Your employment status (full time, self-employed etc)
• Your regular expenses
• Your other debts (e.g credit card limits)
• The assets you own
• How many dependents you have

Lenders typically also use these factors to determine your interest rate.

Essentially, the more risk a lender sees in your application, the higher your rate is likely to be.

• Complete an application form with your personal and financial details
• Lenders generally also ask about the purpose of the loan to assess if it is suitable
• Provide any supporting document requested (e.g. payslips, bank and credit card statements)
• Wait for your loan application to be assessed (this can also happen very quickly)
• If approved, sign a loan contract
• The loan funds will be transferred to your nominated bank account

It may be possible to have a medical loan approved with the funds in your bank account in 1-2 business days.

For more complicated applications, like bad credit personal loans or low doc personal loans for self-employed borrowers the process will likely take a bit longer.