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Can you get a medical loan without any collateral if you have bad credit?
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A medical loan is a type of personal loan that you can avail when you need help meeting medical bills and emergencies relating to your or your family’s health. Because medical concerns are time-sensitive in nature, medical loans are quick to apply for and just as quickly disbursed once approved. The entire process, in fact, is online and you can get the funds you need in your bank account in just a few clicks. However, if you do not have any collateral or have bad credit, you may be wondering if you are eligible for a medical loan. Read this article to find out.
A medical loan or a medical emergency loan does not require any collateral. It is a form of unsecured loan. Whether or not you have a good credit score, there is no need for collateral when applying for this personal loan. Unlike secured loans, you do not need to put up your assets such as home, vehicle, investments, gold, etc., as security. This is one of the biggest advantages of a medical emergency loan.
For personal loans like medical loans, lenders prefer a credit score of 750 and above. This is because there is no collateral involved, which means the risk for the borrower is anyway high in case the lender defaults on Equated Monthly Instalment (EMI) payments.
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But if you have a credit score below 750, it is not impossible to get a medical emergency loan. If you meet other eligibility criteria of the lender, some may consider approving your loan despite poor credit. However, this will come at the cost of a higher interest rate. Hence, if you have bad credit and are opting for a medical loan, you should carefully consider what the interest burden will turn out to be for you.
For this, you can use a personal loan EMI calculator that determines your monthly EMI dues and shows you your total interest cost on the medical loan. Using this calculator before you click on the personal loan apply button is prudent as it allows you to take a medical loan that you can comfortably pay off over your chosen loan tenure.
While collateral is not required when applying for a medical loan, if you have bad credit and do have some asset that you could offer as collateral, it may make it easier for you to get the loan. However, this depends on the policies of the lender and if they are providing a secured personal loan. In case of an unsecured personal loan, there is no provision for collateral.
Thus, for an unsecured personal loan, you could consider applying for a medical loan with a co-applicant. Your co-applicant's credit score, if good, can improve the overall eligibility criteria of your loan application.
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