A lot of people think that times have always been difficult for them, and no matter how much they earn, it seems to never be enough anyway. Sometimes, even if it’s enough, it’s really just that-enough. Many people live from paycheck to paycheck and more than 50% of the middle class Americans have a huge chunk of credit card debt. To add to that sad statistics, many people admit to not being able to save enough and save religiously. What happens now when an emergency strikes, like medical bills? Will a medical loan be enough to cover what you need covered?
The quick answer to medical emergencies are medical loans. You avail them because somebody in your family got hospitalized and your income can’t pay hospital bills incurred and/ or you need more time to figure out how to cover all the expenses. Medical loans may be a quick way out of those piling medical bills but you must be careful about managing the cash that you get from such loans, because they’re worth so much more than you can imagine. Here are some tips on managing medical loans properly:
Like getting any other loan, you must study the terms well. There are a lot of financial institutions which offer easy-approval loans but remember to read the fine print all the time. How much is the interest rate? How much is due per month? How much maximum time to you have to pay off everything? Study all the trappings that come with the loan and place it vis-à-vis your income. Don’t be afraid to ask questions for anything that concerns help with medical bills. Being informed really helps a lot.
Will you, realistically, be able to pay it off depending on your regular income? If you think that the loan you’re getting may be paid off with portions from your regular income, then most likely it is still safe to get that loan. The healthy ratio for the monthly due is 20-30% of your total income. With that, you’ll still have enough to pay for your other essentials.
Now, for the difficult part: if your target time bracket (to pay off of the loan) seems difficult to beat, what is your Plan B? If you have assets which you can easily convert into cash, make a list of all these assets and consider pawning them off or selling them in case you’re short for your monthly dues and you have no one to borrow money from. Never risk to miss out on a payment because the penalty fees may be higher than you can imagine. Many medical loans are classified under emergency loans like salary loans, so they have higher interest rates than regular loans like business loans and credit card loans.
Those are, pretty much, the things that you need to remember when getting a medical loan. Always put practicality at the top of your list and keep an open mind so that you are keen on your Plan B’s in case things don’t work out as planned.