What Is a Bariatric Loan?
A bariatric loan is a medical loan explicitly designed to finance weight loss procedures. It can be used to top-up the amount our insurer will pay, or it can cover the entire cost. Typically, a lender will fund most bariatric surgery, from small procedures to extensive surgery.
Bariatric Loan Process
When we are looking for a bariatric loan, there can be an overwhelming number of options to consider. Before we apply for financing, we should discuss the surgery and costs in detail with our medical provider. Depending on the complexity, the price can vary significantly. According to The National Institute of Diabetes and Digestive and Kidney Diseases, the average expenditure is between $10,000 and $25,000. The process of getting a loan will depend on different factors. These can include the price of the surgery, whether we have insurance cover for part of the procedure, our credit history, our preferred type of loan, and our preferred lender. It is worth checking out the lenders’ processes, including the length of time from application to a decision before moving forward.
How to Apply
The application method will depend on how we are planning to finance the surgery. Before beginning the application process, we should understand exactly which procedure will be carried out, the general surgical cost, and any other associated medical expenses. In addition, we should be prepared to provide the lender with all necessary documentation to support the application. This may include pay-slips, proof of ownership for collateral, and proof of ability to repay the loan.
How Weight Loss Surgery Financing Works
If we apply for weight loss surgery financing, we should understand what it will cover. Many lenders insist that the money is only used for the explicit purpose of the procedure specified in the loan application. If future plastic surgery correction is important, make sure it is covered in the loan agreement.
Weight Loss Surgery Financing Options
Once we know the amount our weight loss surgery will cost, we can investigate the best way to finance it. Depending on our financial circumstances, credit scores, savings, and health plans, there are several options that we should consider before making a decision.
Secured Medical Loan
If we have something of value, then a secured loan can often be the cheapest option. It is guaranteed against collateral, typically a house, car, or boat. It provides security to the lender if the payments are defaulted and loan not repaid. These loans usually have some of the lowest rates of interest, making them the most affordable. The interest paid can also be tax-deductible. On the downside, if the payments aren’t made, then the collateral may be at risk.
Hospital Payment Plan
As the cost of bariatric surgery can be high, many practitioners and hospitals offer a payment plan. This allows the procedure to go ahead and be paid off in monthly installments. Such a payment plan is, effectively, an in-house weight loss loan.This funding is usually offered at a lower interest rate than other lending options. The benefit of a hospital payment plan is that the procedure and costs are known in detail. In some cases, the hospital or practitioner may also be able to lower prices to make the surgery more affordable.
If we have a 401K plan, we can usually borrow up to $50,000 or half of our balance as a loan. The advantage is that this form of financing is not subject to credit checks, so we need not worry if our credit score is less than perfect. The interest rates are generally low, and payments simple. The loan is paid back monthly straight from our paychecks. The typical term is over five years, so it is worth considering if we plan to stay in our current employment for that period. In some cases, if we leave our employer before the loan is paid off, then the remaining sum can become payable in full. If you are considering this option, it is worth checking the details with your employer or with your accountant.
Health Savings Account
A Health Savings Account (HSA) is a tax-advantaged savings account, specifically designed to provide funds for medical expenses when we need them. If we have an HSA, this can be a great way to pay cash for a weight loss procedure. Bariatric surgery is a qualifying medical expense under this scheme, and so withdrawing funds for this purpose should be straightforward.
If we have a good credit score, we can consider an unsecured personal loan. There are several lending options for this, such as banks, credit unions, online providers, and peer to peer lenders. As this loan is given without security, we can expect to pay higher interest rates on the funding than a secured loan. The length of time the loan is taken out over will also affect the interest rate, as will our credit score and income. While it is possible to obtain a personal loan with bad credit, the interest rates are usually much higher than other options. Some lenders specialize in this type of loan, however, so it is worth investigating the available options.