Should You Take Out a Loan to Cover Medical Expenses?
If you’ve recently been the victim of a personal injury, you may be facing severe medical expenses. You’ve likely been to the hospital, to multiple doctor’s appointments and visits to specialists, and even to physical therapy sessions. Already, the bills may be piling up. And to make matters worse, you may not be in a position to work due to your injury.
The good news is, if you have a good case, you should be able to win a settlement that covers your medical expenses (and then some). But since it takes weeks, and sometimes months, to resolve a case, you’ll be in a tight spot in the meantime.
Is it a good idea to take out a loan to cover your medical expenses while you’re waiting for your settlement money?
Immediate Options for Medical Expenses
Let’s take a look at the options you have for covering medical expenses that don’t have anything to do with taking out a loan.
For starters, we need to stress the importance of getting the medical care you need to recover. Some people are tempted to skip appointments or avoid certain types of treatments as a way to cut costs. However, this could make it harder for you to physically recover from your injuries – and just as importantly, it could compromise your case.
When you do get treatment, you have a few options for payment:
- Tapping into health insurance. If you have a strong health insurance policy covering you, feel free to use it when paying for your bills. You may be responsible for a copay or a reduced total amount – and your insurance company will take care of the rest in the meantime. If you win a settlement, the defendant’s insurance company will be responsible for reimbursing your insurance company for the costs (as well as you, for whatever portion you personally paid).
- Paying bills directly. You can also decide to pay the bills directly. This may or may not be in your best interest, depending on your personal savings. If you have plenty of cash and minimal financial concerns, you can pay these bills and wait for reimbursement. But if you’re struggling to stay afloat, this isn’t your best option.
- Working out an alternative payment plan. Consider working with your healthcare providers to work out an alternative payment plan. You can even let them know that you’re expecting a settlement. They may be willing to break your bills down into smaller payments or delay the due date.
- Simply waiting. Another option is to simply avoid paying your medical bills for as long as possible, waiting for your case to settle and for your settlement money to arrive. If you’re dealing with a short-term time horizon, this isn’t such a big deal – but you don’t want missed or late payments to accrue interest and affect your credit score.
If you’re dealing with copays, if you’re paying bills directly, or if you’ve worked out an alternative payment plan, getting a loan can help you.
The Problems With Most Loans
There are some problems with conventional loans. Securing a loan can help you pay off your bills quickly, but:
- High interest rates. Many loans come with high interest rates that accrue and compound over time. If you don’t pay off the balance of the loan relatively quickly, you can end up owing much, much more than you originally borrowed. This is especially true if you’re using credit cards – which can have interest rates north of 20 percent.
- Strict terms. Some loans also come with strict terms, dictating how and when you can use the money or imposing fees for behaviors that fall outside the norm. For example, you might face a penalty if you pay off the loan too early, or you might be subject to additional service charges.
- Difficulty getting approval. If you’re currently out of work, if your credit score isn’t great, or if you don’t have a “good reason” for getting the loan (as considered by the bank), you may have difficulty getting approved. In other words, a loan may not be available to you even if you want one.
- Trading one problem for another. In many cases, getting a loan is just trading one problem for another. You won’t have to deal with medical bills in the short-term, but you’ll have to deal with your new debt in the long-term.
The Advantages of Lawsuit Funding
Instead of seeking a conventional loan, you could pursue lawsuit funding or a settlement loan. Lawsuit funding is a special type of loan designed to get settlement money in the hands of plaintiffs faster.
Here are some of the advantages, assuming you can find a reliable and trustworthy provider:
- Immediate money. In many cases, once you’re approved for lawsuit funding, you can get the money the same day. In other cases, it only takes a few days. If you’re struggling to make ends meet, this can be extremely difficult.
- High rate of approval. If your case has a high probability of winning, you’re likely to be approved. After approval, if you don’t receive settlement money, you don’t owe anything – so you don’t have to worry.
- No Risk. Settlement loans are typically non-recourse. Meaning if you don’t win your case you don’t have to pay the money back. And if you use a company like Capital Now Funding, there is zero interest on your loan, regardless of how long your case takes to settle.
- Flexibility. When you get your lawsuit funding, you can use it to pay off your medical bills – but you don’t have to. You can use the money for anything you need before your settlement money arrives.
- Clear terms. You don’t have to question whether the loan is right for you or wonder whether you’ll face extra fees. Most lawsuit funding comes with clear, straightforward terms.
Are you interested in getting lawsuit funding for your personal injury case? Whether you need to pay your medical bills or you just want some peace of mind, this could be the right financial move for you. Contact Capital Now Funding for more information today!