A Comprehensive Guide to Medical Loans in India 2024

In most cases, medical emergencies occur without any notification. You might have heard of people encountering heart attacks, road accidents, paralysis attacks, and several other health issues where the only option left for caregivers is to get medical support urgently. Getting the same is not an issue if you live in a big city but if you live in a small city or a rural area, sometimes it becomes quite difficult to get steadfast health support. This is where getting a medical emergency loan seems feasible which allows people to arrange urgent funds for a health emergency. In this post, you will get to know everything about medical loans and why you should opt for them.

What is a Medical Loan?

A medical loan is nothing short of a personal loan but it is intended to be used only for medical purposes. The amount obtained through a medical loan can be used for different types of health procedures like IVF treatment, pregnancy, medicines, hospital bills, and other such things. Why Choose a Medical Loan in a Health Emergency? Getting a medical loan is similar to opting for a personal loan and there are several banks and financial institutions ready to offer such a loan at attractive interest rates.

There was a time when people coming across a health emergency were opting for a personal loan which comes at higher interest rates. However, with the emergence of medical loans, it has become much easier and affordable for them to meet their healthcare expenses in today’s fast-paced global scenario.

How Do Medical Loans Work?

Medical Finance Loans There are large numbers of money lenders operating in India that provide medical loans. When it comes to determining the application procedure for a medical loan, it remains much identical to that for applying for other types of loan. However, considering the chosen lender, some service providers may follow a specific loan application procedure that might be different from what others are following.

According to experts, since a medical loan is an unsecured loan like a personal loan, borrowers should be ready for high interest rates. This is why some people sometimes prefer other sources of money as compared to taking a medical loan.

The Rising Need for Medical Financing in India

Healthcare in India faces challenges in terms of access, cost and quality. Affordability is a significant concern as over 60% of the population has to pay out-of-pocket for healthcare services. In countries like Australia, Germany, South Korea, Japan, the UK and the US it is below 20%. Italy, China and Brazil have out-of-pocket expenses ranging from 25 to 35%. 

In India, over 65% of the population remains uninsured and this includes both government and private schemes. Furthermore, even among the 35% who are covered, outpatient expenses, diagnostic tests and medication costs are often not included in the coverage provided by government schemes and most private insurance plans. The COVID-19 pandemic has worsened the existing disparities between urban and rural healthcare facilities, underscoring the shortcomings of the current system. It seems that the overreliance on out-of-pocket expenses will continue to be a significant issue in the foreseeable future.

Health insurance plays a crucial role in financing healthcare globally, yet in India, insurance penetration is low at only 30 to 35%, which includes government schemes. Private insurance penetration is even lower at 8 to 10%, leading to a significant underinsurance issue. This is evident from the fact that over 99% of claims paid are less than 3 lakh rupees while the average cost of treatment is between 6 to 10 lakh rupees. 

Innovative on-demand and subscription-based health insurance solutions are beginning to emerge in the market from both corporate and retail perspectives. These solutions aim to break the iron triangle inherent in India’s healthcare ecosystem - addressing affordability (due to high premiums), improving access and raising awareness. 

Several startups are currently operating in the healthcare space on both the B2B and B2C sides. However, the success of these new-age models is still uncertain due to market friction, the necessity of intermediaries and the high cost of customer acquisition. 

Insurance companies are increasingly utilizing blockchain and AI in healthcare financing to streamline the process and ensure quick delivery. For instance, blockchain technology is being adopted in billing and claims processes, enabling secure processing and efficient retrieval of records. This eliminates the need for intermediaries and improves the overall system efficiency. 

What Are the Benefits Of Taking a Medical Loan?

At a time when rising inflation has been affecting everyone’s life around us, medical expenses are no exception. In most cases, people spend more money than when they plan for a medical procedure. And this tends to turn worse in the case of an emergency. Various studies indicate that people become bankrupt just to pay their medical bills.

In such cases, opting for a medical loan in Delhi seems the best idea. Not only you can just pay the medical bills on time to avoid any mishap but you won’t have to borrow money from your friends and relatives that would spoil your relationships.

Some of the major benefits of taking a medical loan in Delhi are:

• You can choose to secure the money for any health emergency much quicker than waiting for your insurance company to provide a claim to the select
• Since a medical loan is an unsecured loan, you won’t need to put any collateral at stake
• A medical loan doesn’t affect the credit utilization ratio on the CIBIL score
• In some scenarios, medical loans are known to perform better than other financing options
• Medical loans come with better repayment terms
• Option to utilize the borrowed funds to pay for extra medical expenses, such as room costs throughout the hospitalization

Types of Medical Loans Available in India in 2024

All medical loans in India are unsecured loans. So, apart from this type of medical loan, Indians can also finance their upcoming or unforeseen medical expenses with the help of a medical credit card. In this section, we will discuss the types of medical loans that are currently offered to Indians. 

Unsecured Medical Loan

Medical loans, also called unsecured personal loans, are designed to help cover unexpected medical costs. These costs can range from hospital bills to medication expenses and even surgery or chemotherapy costs. By taking out a medical emergency loan, you can ensure that you receive the necessary treatment without worrying about financial constraints. Ultimately, an unsecured medical loan can provide peace of mind by helping you clear out all medical bills during a cash crunch. 

• No Collateral Required: Medical emergency loans are different from other types of loans because they don’t have to provide any security to get approved. You just need to fill out an online application with your personal and financial information and the lender will assess your eligibility and offer a loan accordingly. 
• Covers All Ailments: Medical loans are a versatile way to finance your healthcare needs, ranging from routine procedures to major emergencies. With a medical loan, you can use the funds for a wide range of expenses, including diagnostic tests, chemotherapy, dental work and hospital bills. This allows you to access top-quality treatment at the hospital of your preference. 
• Simple and Stress-Free Process: Applying for a medical loan typically involves meeting age and income criteria, as well as potentially undergoing a credit check. Fortunately, the process is generally straightforward, requiring minimal paperwork and the submission of essential documents. This can make it easier to obtain the loan you need for medical expenses. 
• Flexible Loan Repayment Options: You can make use of a medical loan EMI calculator to determine the EMI that fits your budget. This tool considers factors like repayment tenure, interest rate and loan amount to assist you in planning your finances effectively. With the flexibility offered by medical loans, you can ensure timely repayments while managing your monthly expenses more efficiently. 
• Fast Approval and Payment: Medical emergencies can be time-sensitive, requiring you to secure funds as quickly as possible. Applying for a personal loan online enables you to bypass the lengthy wait for approval and disbursement. Online lenders typically expedite the process by promptly verifying your eligibility and documents before swiftly disbursing the funds. 

Medical Credit Cards

Using a medical credit card can provide financial assistance for ongoing or upcoming medical expenses. However, it is important to be aware that there is a possibility that these credit cards can end up being more expensive than your original bill. 

Medical cards vary in their coverage of medical services and procedures. Certain cards only provide coverage for in-hospital services and non-elective surgeries, while others are geared towards more cosmetic and elective procedures. It is important to note that participating medical providers and hospitals may accept one card but not another. 

FAQs

 

Q. What Is A Medical Loan?

-: A medical loan is a kind of personal loan that can only be utilized to cover the expenses related to a medical procedure like surgery, hospital bills, medicines, etc. As a medical loan is an unsecured loan, it comes at a higher interest rate than its counterparts.

2. Are The Interest Rates Of A Medical Loan And Personal Loan Similar?

-: Yes, in most cases, the interest rates levied by lenders are the same for medical loans and personal loans.

3. How Would I Get The Loan Amount – One-Time Or Partial?

-: It primarily depends on the lender you select for the loan. Some provide the approved loan amount in one go whereas some give it in different portions during the treatment.

4. How Can I Repay The Loan Amount?

-: There are several ways to pay back the borrowed amount like post-dated cheques, standing instructions, etc.

5. Can I Customized The Medical Loan Offer Made By A Lender?

-: Some money lenders allow borrowers to customize their medical loan offers to help them get the money in their preferred way.

The Conclusion

Be it a short-term health procedure or a long-term one, opting for a medical loan in India is undoubtedly the most effective way to secure funds. At a time when medical loans come with easy repayment options, flexible terms, and affordable interest rates, you shouldn’t think twice before going with this type of loan in the case of a health emergency. However, it would be better if you compare different medical loan offers available to you before locking the one that matches your needs the best.