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.
Remember to Shop Around!
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:
- Don’t just look at the interest rate; if you just look at the interest rate and the total amount to repay you might feel like you’re saving money, but end up not having a particularly nice experience with your loan provider.
- Look for any additional charges and penalties; especially those for early or late repayments.
- Check out potential lenders’ reviews; all the best loan providers will have reviews online. Read what their customers are saying about them!
- Don’t apply for multiple loans to get different offers; applying for credit on several occasions in a short period of time will damage your credit score. Don’t mistake “shopping around” for applying for a lot of loans to see which offer is the best, it could do serious damage to your credit score in the long term.
- Remember that comparison sites don’t include every provider; comparison sites can be useful, but not every personal loan provider will have their products featured on them. You should also remember that often the best deal is actually to go direct and not through the comparison site!
- Take your time; even if you have an urgent need for the money to cover medical costs, rushing a decision now will usually lead to regrets later.
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.
Check Your Credit File!
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.
Look Closely at the Repayment Terms
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:
- Excessively high interest rates; especially if you are offered a short lending term.
- High repayment amounts; often you will see these at the start of your loan term in order to “clear the interest down.”
- High servicing or admin fees, especially if they have to be paid regularly and on top of your interest rate; you should also ask what portion of your comparison rate is actual “interest” and what is fees.
- No interest loans; these can seem attractive but they’ll actually have inflated admin fees that will add up to a huge sum and interest rate equivalent.
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.
Don’t Overextend Yourself
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.