Medical loan is a type of personal loan that offers funds for urgent medical expenses with flexible tenure to repay and minimal documentation. These loans serve as a practical alternative to pay for dental, cosmetic, and medical procedures. They cover expenses from hospitalization, treatments, surgeries, medications, to preventative care. Multiple benefits are provided by these loans such as no collateral requirement, immediate access to funds, coverage for large medical expenses, and instant approval. In addition, they offer faster processing, lower interest rates, and easier eligibility criteria as compared to standard personal loans.
Medical Loan Emerging as a Crucial Financial Tool
Rise in healthcare costs and alarming increase in prevalence of chronic diseases act as the key forces driving the demand for medical loans. According to a 2024 study by the World Health Organization, chronic diseases resulted in 43 million deaths in 2021. Allied Market Research stated that the medical loans market is estimated to garner a revenue of $320.3 billion by 2032. The industry accounted for $161.9 billion in 2023 and is anticipated to grow at a CAGR of 8.2% from 2024 to 2032. Revenue growth is additionally supported by factors such as increase in awareness of financing options and efforts to improve credit access as well as rise in penetration of fintech-driven lending platforms to make medical loans more accessible. Thus, approximately 80% of adults globally now have access to formal financial services, which facilitates the adoption of medical loans, reveals a study published in Global Findex 2021.
Assessing Various Financing Options for Emergency Medical Needs
Currently, patients have access to multiple financing options apart from conventional medical loans, including hospital-provided financial assistance, crowdfunding, medical credit cards, payment plans, and buy now, pay later services, which offer flexible repayment terms and immediate access to funds for medical expenses. In hospital-provided financial assistance, some hospitals offer financial support through free or discontinued services, depending on the patientβs financial background. On the other hand, crowdfunding platforms such as CoFund Health, GoFundMe, and PlumFund allow patients and their families to raise funds for their medical expenses. These platforms enable individuals to create fundraising campaigns; share their stories; and receive donations from friends, family, and the general public.
Furthermore, unlike a regular credit card, medical credit card is used only to pay for medical expenses, covering treatments and medications that are not covered by traditional health insurance policies such as dental care, cosmetic treatments, and hearing examinations. On the contrary, payment plans are offered by many medical facilities such as hospitals, dental clinics, and specialty care providers that allow patients to repay the treatment expenses over a period of months rather than paying the full amount at a time. Some providers offer interest-free payment plans, which provide a more affordable option for individuals who may not be eligible for medical loans or prefer not to use credit cards. Buy now, pay later service is a short-term financing option that facilitates immediate payment of medical expenses and pay for them in installments over a set period of time. With such wide range of options available for supporting medical needs, patients can choose the most suitable financial solution depending on their treatment costs, insurance coverage, and ability to repay without any financial strain.
Final Remark
With rising prevalence of chronic diseases and increasing inflation rates, the demand for medical loans is increasing considerably. The demand is further boosted by their associated benefits such as instant approval, faster processing times, and lower interest rates as compared to regular personal loans. Moreover, to offer easier access to medical emergency funds, different types of medical financing options are available such as buy now, pay later services, crowdfunding, hospital-provided financial assistance, payment plans, and medical credit cards.
β **π¨ππππππ ππππππ: Akshata Tiwarkhede
Akshata Tiwarkhede is an experienced content editor with nearly 10 years in the field. Recently, she has expanded her expertise into business writing, applying her editorial skills to create clear, precise, and professional content. With a keen eye for detail and commitment to quality, she continues to refine and develop content that aligns with industry standards.
