When looking for a personal loan to cover your medical expenses, it’s easy to make mistakes, especially if you’re hastily looking for a loan to help you pay an unexpected medical bill, or if you’ve had a quote for treatment that’s thousands of dollars more than you thought it would be but need to act fast.
Here’s a look at some of the biggest personal loan mistakes you should avoid when thinking about how to cover your medical costs.
When you want to get something sorted out quickly, it is tempting to just accept the first thing you find or are offered. If you do that when looking for a personal loan for your medical expenses, you may end up repaying thousands of dollars more than you need to or taking out a loan with a company that doesn’t really care about you.
Unfortunately, buyer’s regret won’t count for anything if you have a payment plan that lasts for seven years, and you find a better loan just after the one you accepted hits your bank.
Follow these golden rules for shopping around:
Remember that with MacCredit we provide you with a range of payment plan options to cover the cost of your medical bills, while you can also use MacList to find clinics and doctors near you that provide the treatment you are seeking.
It is easy to check your credit file and ensure that all the information held on it is correct, and if there’s any incorrect information held on there, it’s quite straightforward to resolve, too.
You should really check your credit file before you apply for any type of credit. Not only do you ensure the information that’s in it is correct, but you also can then go and apply for loans with a degree of confidence that you’ll be accepted.
Despite the personal loans industry being more heavily regulated than ever before, there are still some lenders out there who offer ridiculous repayment terms that have the potential to put you in difficulty.
Look out for the following:
If you find yourself needing to take out a loan quickly you’re more likely to fall into one of these traps, so remain diligent and again, take your time and ask all the questions you need.
Lenders usually take the flak when it comes to not lending responsibly, but it’s up to you to be a responsible borrower, too.
With this in mind, you should spend some time putting together your own financial plan so you can understand what you can afford. Think about potential changing circumstances, too. Do you have a variable rate mortgage, for example, and what would the implications be if your mortgage repayments increased? Likewise, if you opt for a variable rate medical loan or payment plan, what tolerance do you have for the payments increasing should interest rates go up?
Remember that irrespective of whether you’ve borrowed irresponsibly or the lender has lent to you irresponsibly, ultimately it is your credit file and your credit score that will be damaged.
Avoid these common mistakes when it comes to finding a personal medical loan, and you’ll find the best plan for you that enables you to save money and enjoy fantastic customer care while being able to undergo the treatment you need.
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.
Whether you are young and have limited credit history, or have a poor credit score due to problems in the past, it may be tempting to ask someone to take out a personal loan on your behalf. It isn’t against the law to do this, so it really comes down to the trust between the person who needs the loan and the person who will be taking it out on their behalf, and the arrangement they come to in relation to paying off the loan.
However, taking out a personal loan on behalf of someone can be a risky thing to do. Here are some of the considerations you should make, whether you’re the person who needs the loan or the person who will be taking out the loan on behalf of someone else.
Let’s say you’re the person who has taken the loan out on behalf of someone else, and you then fall out with $10,000 remaining on the loan balance. Unless the other person continues to honour the repayments, you’re going to end up liable for this $10,000 yourself. Unfortunately, you can’t call up the loan company and say “Actually, I took this loan out for someone else,” for them to turn around and say “Thanks for letting us know, don’t worry about it!”
One way to avoid this happening is to have a contract written up for the loan repayments, in effect saying that you have given a loan to the other person, so at least you have some form of legal option should you fall out later. Admittedly, asking someone to sign a contract like this isn’t easy, as straight away they might think you don’t trust them.
Same scenario, but you haven’t fallen out this time. Instead, the person who needed the money has lost their job or ended up taking a pay cut, and now they can’t afford to repay the loan.
Again, the onus falls on you to repay the loan.
If something has a negative effect on your credit file, it has the potential to have a hugely negative effect on your life in general.
How will taking out a personal loan on behalf of someone else effect your credit file?
While it isn’t against the law to take out a personal loan on behalf of someone else, you really need to think carefully before you do it. While it feels great to help someone out, in the long term it could lead to serious problems for all parties.
If you need a personal loan but can’t get one, remember that at MacCredit we accept joint loan applications, so if you’re a couple you can apply together rather than have one of you take out a loan on behalf of the other.
Apply for your MacCredit payment plan now.
Banks and other finance companies will consider many things when assessing an application for a personal loan. While you’re probably used to submitting your details so a lender can run a credit check against your name, in recent years, particularly as regulations around responsible lending have tightened, you will have found yourself entering details of your regular spending so that lenders can get an idea of what you can afford. Prior to having to submit such detail, it was usually enough to simply provide evidence of your income. Alongside the outcome of the credit check, a lender would then make a decision on what they can lend to you, and at what interest rate.
In asking for this information, lenders are looking to determine your debt capacity. How do they do this, and what can you do to work it out for yourself, in order to get an idea of what you can borrow?
When asking for information about your existing expenditure, essentially what lenders are doing is asking you to provide your household budget. If you have already taken the time to plan your own budget, and you know exactly what your incomings and outgoings are, then you will likely already have an idea of what your debt capacity is.
As part of this review, lenders may specifically look at your existing debt repayments and credit commitments. The information you have submitted may also be checked against the information the lender can see when they review your credit report.
While lenders will consider your debt capacity when you have made an application, in many cases, including here at MacCredit, we will seek to determine this, and thus what you can afford, during our initial conversation with you. This not only enables us to determine which loans are affordable for your circumstances, but also to ensure you do not over-expose yourself to debt.
While some consumers can see the submission of certain details as invasive, ultimately when lenders aim to determine debt capacity it is for the benefit of the borrower. While consumers may find it upsetting or annoying that they have been declined for a loan, or told they can only borrow a certain figure, lenders have a responsibility to ensure they lend responsibly, and would be acting negligently if they were to lend money without fully considering each individual’s debt capacity.
From a consumer perspective, it means you’re not going to find yourself with debts you cannot repay, a scenario which can then lead to your credit history being damaged and an inability to acquire credit in the future.
Determining your debt capacity is simple. All you need to do is plan your budget and work out what you have left as disposable income from all your incomings and outgoings. You can then work out how much of that disposable income can be used for repaying debts. Remember that you will need to consider how much you are paying out for current debt repayments within this. Please note that lenders may make a decision not to lend to you, even if you feel as if your debt capacity allows you to take on more debt and continue to meet your repayment obligations.
You can also enhance your debt capacity by sharing your financial obligations with your partner. When asking for your outgoings, lenders will ask about what you are personally responsible for, and how much you are paying out. If mortgage payments, electricity bills, and your other living expenses are split between two, this will reduce your individual personal outgoings and so enhance your own debt capacity. Doing this may make it easier for a lender to approve a credit application, subject to your credit status.
The amount you can borrow for a payment plan will be determined by your credit file as well as your debt capacity. Work out how much you can afford to repay yourself prior to applying, and you may have a better idea of the type of loans you can apply for, how much you can borrow, and the length of loan term you will be able to access.
If you are looking to take out a payment plan to cover medical expenses, MacCredit can help you identify what is affordable for you as well as find a plan to suit your circumstances. Call us today on 1300 884 355 to discuss your options.
If you ever see a loan advertised as interest free, it is understandable that you would find such deals attractive. While these loans might seem attractive at face value, and generate a lot of interest and enquirers from customers, is there really such a thing as an interest free loan?
While an interest free loan might well be interest free in terms of interest applied to the overall loan balance, you’re going to pay for the loan somehow. Loans that are advertised as ‘interest free’ will usually have a ‘merchant fee’ applied, which you repay along with your loan balance each month. In such cases, the interest rate equivalent will have been built into the so-called merchant fee, meaning the finance element itself is not actually free.
In comparison, loans that aren’t ‘interest free’ may still have different fees and charges that are applied, however these will be built into the actual comparison rate you are given when you apply for and accept the loan.
Another potential problem with ‘interest free’ loans is that they can be inflexible regarding making additional payments or repaying the loan off in full earlier than the loan schedule. This is a common source of additional fees with such loans, and can quickly mean you would have been better off accepting a regular loan, even if the interest rate seemed unattractive at first.
Let’s now take a loan advertised as interest free and a loan advertised with an interest rate and show you how to compare the two as you try to make a decision.
Some loan providers might provide a lower merchant fee upfront but then lock you into additional charges throughout the loan term, thus increasing their earnings from your account.
The main thing to remember with this example is that, in most cases, loans such as that shown in loan A will include all administration fees and charges within the actual comparison rate. The only additional charges you are likely to incur with such loans is if you have to pay an extra fee should you want to make an extra payment or repay the loan in full. However, those charges will still apply in the example of loan B.
To get a further idea of how companies offering loans such as B above are charging you, speak with lenders you are considering applying for a loan with and asking about their fees and charges schedule. They will then explain how these are absorbed into the actual comparison rate but also provide a specific breakdown of what you’re paying for.
As well as loans, credit cards, store purchases, and other types of credit are often advertised and packaged as being interest free.
In these cases, interest free usually only applies for a specific promotional period. After the promotional period has ended, interest will be applied, and the rate will often be much higher to compensate for the 0% rate earlier. Some credit cards and store cards even offer deals where you don’t have to pay anything for a specific period of time, alongside a 0% interest deal. For example, you could open a new credit card that is advertised as 0% interest for six months, as well as pay nothing for six months. If you aren’t switched on when it comes to managing your finances, you might look at this and think you can save a fortune by not repaying anything over six months. However, after six months the high interest rate is suddenly going to kick in, and you’ll have missed the opportunity to clear your balance before this happens.
As with personal loans that are ‘interest free,’ such products will usually also have an additional schedule of high charges and fees, and be very inflexible, as a counterbalance for no interest being applied.
Ensure You Aren’t Caught Out
We understand how easy it is to be taken in by attractive looking offers such as ‘interest free,’ be it on a loan, a credit card, or any other type of finance or credit product. However, by looking closer at what is being offered, you will usually identify that the ‘interest free’ deal could end up costing you a lot more than if you just chose a product that applies a regular interest rate. The only exception would be if you use a 0% credit card and ensure the balance is cleared before the end of the promotional period, however you would need to make sure you are set up to manage your finances well to ensure you don’t get caught out with these.
If you are considering a MacCredit personal medical loan and want to know how much of your interest rate is made up of administrative fees and charges, call us now on 1300 884 355.
Credit Reports, Payment Options
When looking for a payment plan, whether it is for a medical loan with MacCredit or you are looking for finance for another purpose, there are several things to consider. Probably the most important from your perspective is whether the plan you are looking at is affordable. Finance providers usually advertise their deals in terms of interest rates, so it can be difficult to understand what really is affordable for your circumstances.
What might appear to be the cheapest deal will not always be the most affordable. The key thing to consider with affordability is that it is specific to your circumstances. Finance companies advertise their cheapest or best deal to everyone, simply because they would need an individual advert for each potential customer were they to look at affordability.
As advertising by finance companies can make their products seem inflexible, you might easily be put off by an advert stating example repayment amounts that are way beyond your means. However, the example rates provided do not need to prove a barrier to you accessing finance.
Affordability is simply the weekly (or fortnightly or monthly, depending on the terms of your payment plan) figure that your circumstances mean you can afford to repay. What is affordable is therefore unique for each individual when they are seeking a payment plan. Just because a specific deal seems attractive or is affordable to one person, this doesn’t necessarily mean it will be attractive or affordable for all. You can work out what is affordable for you by taking some time to plan your personal or household budget, and coming up with your disposable income figure.
Once you know the figure that you could afford to comfortably repay, you can then tailor your shopping around for payment plans to meet this amount.
You’re searching for a payment plan as you need to borrow $10,000, and identify two different providers. Provider A offers a 15% interest rate, while Provider B offers a 14% interest rate. The immediate thought is that provider B will be cheaper. However, you also need to consider the length of the payment plan.
In this example, were Provider A offering a loan term of 60 months, and Provider B a loan term of 30 months, Provider A would be the much more affordable option, as demonstrated in the table below.
As you can see, despite Provider B likely being perceived as the best deal due to the lower interest rate, by going with Provider A you can access the financial help you need and save nearly $40 a week on the repayments.
While calculating your affordability will help determine how much you can borrow now, longer term it can help you avoid credit infringements such as missed payments and defaults.
Here at MacCredit, it is our aim to match you with the most affordable payment plan for your circumstances. We work with you to understand your affordability and will then find the best option for you. This allows us to avoid promising cheap deals or interest rates only for our customers to end up paying more than they thought they would, or feeling that a MacCredit personal loan is not affordable.
We will always look to match you with a payment plan that suits your circumstances and ability to comfortably meet your repayment obligations.
If you are looking for an affordable payment plan to cover medical costs, call us at MacCredit now on 1300 884 355.
As individuals we are always looking for ways to save money. Even when considering how and the reasons for borrowing, there are opportunities to save. Here are some great tips for saving money when borrowing; keep them in mind the next time you’re planning to take out a loan or make a high value purchase.
This might sound like an obvious tip, but it is amazing how many people simply accept the first deal that they find when looking for a payment plan or loan. The next time you are looking for a loan, credit card, or another finance product, help yourself by drawing up a list of what you’re looking for.
This might include a specific type of loan or a certain level of repayments. By listing your requirements first and then eliminating any lenders that can’t meet your needs, you ‘ll quickly find yourself looking at the best deals for your circumstances, and you’ll avoid simply taking out the first product you find.
If you focus on affordability, you are likely to find yourself saving money when borrowing. When we talk about affordability, we mean the repayments you can afford to make comfortably within your household budget and current circumstances. Let’s look at these two scenarios for someone looking for a personal loan:
Person A goes to a finance website, sees the example terms and repayments advertised, can’t afford them, so leaves and doesn’t apply for a loan. This pattern is repeated throughout the shopping around process.
Person B works out what is affordable for them, then starts shopping around. Because they already know what’s affordable, they can quickly dismiss the lenders that don’t offer a flexible finance option, and can quickly look elsewhere.
By looking for a loan that is affordable, rather than simply taking out the first loan you find, not only could you save a significant amount of money but you also reduce the risk of missing payments and damaging your credit file as a consequence of borrowing more than you could really afford.
If you are planning a holiday, or are considering undergoing cosmetic surgery to improve your appearance, you might be able to save money by opting for finance rather than using your own savings. When you are looking to fund a lifestyle purchase, you can take the time to shop around, understand
what is affordable, and then find a specific loan or payment plan that fits your needs. If you spend your savings on your lifestyle purchase, then find yourself with an emergency expense, you may find yourself taking out the first loan that comes available, or even using dangerous short term finance.
By holding onto your own capital to cover emergency costs when they arise, you can instead use a payment plan for your lifestyle purchases, and repay loans at an affordable rate over a time suited to you and your financial circumstances.
Here at MacCredit, we are specialists in helping our customers find the best and most affordable loans if they are looking to secure finance for medical treatments or procedures. We are committed to ensuring you find the best payment plan that is most affordable under your circumstances.
By coming to us, you will be put into contact with the lenders that provide payment plans closely suited to your needs, which can help you save a significant sum of money in the long term. It is possible to save yourself significant sums money when borrowing if you follow these tips. If you are looking for a payment plan to cover the cost of a medical procedure, call us now on 1300 884 355.
How To, Payment Options