Jitin Bhasin, CEO and Founder of SaveIN
Indians are prioritizing personal health and wellness, and as a result there are often situations, both planned and unplanned where the cost of treatment is neither covered by insurance and nor affordable, making it a frictional experience.
This is where on embedded finance for healthcare and medical expenses is a great option.
However, it is crucial to approach this decision with careful consideration and thorough planning.
Here are eight essential points to keep in mind when taking a loan for medical expenses.
1.Understand the need for the medical procedure and desired outcome
Before taking any financial steps, it is important to fully understand the necessity of the medical procedure. Consult with dependable healthcare professionals to grasp the details and implications of the procedure, and what the expected outcomes are. Knowing the specifics will help you make an informed decision about the viability and timing of the procedure.
2.Total costs of the procedure
Medical expenses often extend beyond the procedure itself. Ensure that you account for all related costs, including pre-procedure consultations, diagnostic tests, hospital stays, medications, diet plans and post-procedure follow-up visits. By having a comprehensive view of the total costs, you can avoid unexpected expenses and plan your finances more accurately.
3.Loan provider, terms, and charges
When considering a medical loan, scrutinize the terms and conditions carefully. Look out for interest rates, processing fees, prepayment charges, and any hidden costs. It is often observed that especially in the case of emergency situations, customers end up ignoring key terms of the loan and end up paying extremely high interest or fee, which can be avoided. It is advisable to opt for reliable and compliant loan providers and startups operating in this segment.
4.Tenure of the loan and instalment to suit your repayment capacity
The tenure of your loan and the monthly instalment amount should align with your repayment capacity. A longer tenure may reduce your monthly payments but could result in higher overall interest costs. Conversely, a shorter tenure might mean higher monthly payments but lower total interest. There are also options where you can pay part of the expense upfront and take a loan for the remainder of the amount.
Carefully assess your financial situation and choose a plan that balances affordability with total cost.
5.Documentation and time for disbursement
In medical emergencies, time is often of the essence. Choose lenders that offer quick and hassle-free approval processes. Many healthcare-fintech startups now facilitate instant and digital loans, which can significantly cut down on processing time. These loans often have a streamlined application process, allowing you to secure funds quickly when they are most needed.
6.Check Your credit profile
Your credit score plays a vital role in determining the terms and approval of your loan. Before applying, review your credit profile and ensure it is in good standing. If you have other ongoing loans, consider how additional debt will impact your overall financial health. Keeping your credit utilization in check will help you secure better loan terms.
7.Evaluate other expenses
Taking on a new loan means adding to your existing financial commitments. Evaluate your current loans and regular expenses to see how an additional monthly instalment will fit into your budget. It is essential to ensure that the new loan does not over burden you financially. Creating a detailed budget can help you visualize the impact and make a more informed decision.
8.Look for practices that offer No-cost EMIs
Innovative startups now offer no-cost, or zero interest payment plans designed for healthcare. Explore startups and healthcare providers that offer such payment plans that might be most favourable for you. These new age payment plans are subsidized by the healthcare practices and allow you to avail the treatment of your choice with zero or small down payment, while paying for the remainder in monthly instalments, at no additional interest or fee.
Conclusion
Taking a loan for medical expenses is a significant financial decision that should be approached with careful consideration and planning. By understanding the necessity and costs of the procedure, scrutinizing loan terms, and evaluating your overall financial situation, you can make an informed decision that ensures you get the medical care you need without undue financial stress. Remember to explore all available options including new age no-cost EMIs and choose the one that best suits your circumstances.
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