Five Things You Must Know About Medical Loans

By | October 30, 2017

There is no substitute to Health Insurance during a medical emergency. Medical loans come to your rescue when you do not have a Medical Insurance or your medical bill exceeds the sum assured.

Five Things You Must Know About Medical Loans

Heath Insurance is an excellent product to meet future medical emergencies expense. It protects you by financially supporting you during complex treatments as per the coverage size in your policy. However, if you do not have a Medical Insurance or your medical bill exceeds the sum assured or if you fall short of liquid cash, a medical loan could come handy to settle the bill.

While there are generic loans such as Personal Loan available in the market, medical loans are your go-to product in emergencies as the process of sanctioning is less time-consuming and less cumbersome.

Before you opt for a Medical Loan, here are five things you must keep in mind.

Usefulness Of A Medical Loan

Medical Loan can be applied for surgery, therapy etc. for any condition which is listed among the pre-approved treatments offered by a loan provider. A medical loan is unsecured in nature and comes with an interest rate lower than Personal Loan.

Difference Between Health Insurance And Medical Loan

A Health Insurance provides you coverage for treatment cost matching the sum assured. When customers do not have adequate insurance and the treatment bill exceeds the sum assured, the difference amount can be met through a medical loan in case of insufficiency in liquidity. Individuals solely depending on corporate insurance may find medical loan handy if the sum assured is not sufficient to cover the treatment cost at any point.

Eligibility And Processing Time

Since personal and medical loans are not linked to bank collaterals, banks typically look for a Credit Information Bureau (India) Limited (CIBIL) score of 750 and above before sanctioning a loan. However, if the loan amount is relatively high, the lending party might ask for collaterals or third party guarantee. You will also have to furnish a salary certificate or a self-employment certificate.

Medical loans are usually made available within 24-72 hours of the application, subject to document verification. The documents that you require include a completed loan application form, a passport size photo, a valid proof of identity and proof of residence. Some banks and NBFCs may require you to bring along a co-borrower to strengthen your chances of securing the loan.

Interest Rates And Loan Tenure

Interest rates may vary between 12% and 24% per annum. In exceptional cases, the aggregators charge up to 36% due to intermediation cost. The treatment amount is paid directly to the hospital and the loan period usually varies between six months and five years.

Loan Repayment

The loan amount is paid by the lender to the hospital directly. The repayment is done by the customer over the loan tenure in the form of Equated Monthly Instalments (EMIs).

EMIs for personal medical loans are usually fixed for the tenure of the loan. Each EMI repaid has a certain interest and principal component. The initial EMIs typically have a higher interest component in comparison to the later ones.

While at a moment of urgency, you must prioritise arranging for funds, read the fine print carefully and consider the associated charges before you decide upon a product.

BankBazaar is a leading online marketplace in India that helps consumers compare and apply for Credit Card, Personal Loan, Home Loan, Car Loan and insurance.


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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

4 thoughts on “Five Things You Must Know About Medical Loans

  1. Lets MD

    Thank you for sharing such a wonderful peace of work with us , it was very relevant and helpful information in order to understand completely about Medical Loans India. I have read about Medical Credit Card too in the context of medical loans. They are also proving like really good options for getting ones Medical Bills Financed.

    Medical Credit Cards can be defined as specified credit cards which can only be used for specified and specialized treatments only. As there name suggests they can only be used in hospitals during your medical emergencies. One can consider it as Easy Plastic Cash available at the time of your medical emergencies. As we all know medical problems doesn’t come by giving you prior notice but this medical credit card can be your life savior too like a medical loan.

    Please share your valuable comments on the same too.


    1. Team BankBazaar

      Hey there!

      Glad you liked our post. You are absolutely right about how useful Credit Cards can prove during medical emergencies. Keep reading our blog for more insights into the world of finance.

      Team BankBazaar

  2. kaira sharma

    I really love the work, the way you have jotted down every point and covered everything.Medical Credit Card are really really helpful when you do not have proper finance and cash with you.Medical emergency comes unexpected. It can knock your life anytime. In such a situation, there is always a possibility that you find it extremely difficult to arrange cash, especially when the cost of treatment is expensive. In such a situation, people even have to often take a loan.

    1. Team BankBazaar

      Hi Kaira,

      You’re absolutely right! We’re glad you found our post useful. Keep reading our blog for more insights into the world of finance.

      Team BankBazaar


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