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What They Are & How To Get One – Forbes Advisor

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Paying for healthcare in the United States is no easy feat. Even with health insurance—which should make it cheaper—annual median out-of-pocket medical spending ranged from $360 to $1,500 per household depending on the state, according to a 2019 report from The Commonwealth Fund.

For those without good health insurance, the price tag can be far higher. For example, treatment for certain types of cancer for just one year can cost more than $100,000, according to the National Cancer Institute.

The good news is there are often ways to pay these bills. Medical loans are only one of your options, and they can have a big impact on your finances and what healthcare you can afford. Here’s what to consider before you sign on the dotted line.

What Are Medical Loans?

A medical loan is a special type of personal loan that’s only used to pay for medical care. Typically available through traditional banks and online lenders, medical loans are usually unsecured loans, meaning they’re not tied to any collateral. This makes them safer if you end up defaulting, because the lenders can’t take any property from you, such as repossessing your car.

On the other hand, this also means you’ll usually need better credit to qualify. And even with good credit, unsecured loans can be more expensive than those that are secured. You may also have to pay higher origination fees if your credit score isn’t the best.

Benefits of Medical Loans

Medical loans can be especially handy if you need to pay for a large healthcare expense. And there’s certainly no shortage of those right now in the American healthcare world. This type of loan can allow you to get a procedure done to improve your quality of life now, rather than waiting potentially for years to save up the cash.

For example, LASIK procedures are frequently financed. Most LASIK surgeries cost several thousand dollars, and if your vision is bad your only other real option is to wear glasses or contacts for the rest of your life.

Financing the surgery now and paying it off over time can allow you to get the surgery done sooner. That’s an important consideration given that—as with many types of medical procedures—the earlier the operation is done, the better.

Where to Find Medical Loans

You can find medical loans in many of the same places as regular personal loans. There are many online lenders that offer medical loans, and some banks and credit unions also offer them.

Many healthcare providers also offer medical loans. You may be more likely to find these at a doctor’s office that offers expensive elective procedures, such as cosmetic dentistry or plastic surgery. Doctors in these cases know that patients are more likely to pay these bills out-of-pocket, so they often have more financing options available than your average family physician.

Medical Loans for Bad Credit

One of the downsides of medical loans being unsecured is that you generally need good or excellent credit to qualify. This means you’ll likely need a score in the range of 670 to 739 or higher to qualify. But that’s not always the case—there are lenders out there who do offer medical loans for bad credit.

Make sure you’re extra careful to do your homework in these cases, however. As we’ll discuss in the last section, getting a medical loan to pay for your healthcare is convenient, but it’s far from your only option. Medical loans for bad credit (or any loan for bad credit, for that matter) come with much higher interest rates, to the point that you might not be able to afford the monthly payments.

What to Consider When Choosing a Medical Loan

Here are some questions to ask yourself before you take out a medical loan:

  • What is the interest rate? Medical loan interest rates typically range from 4.99% to 35.99%. As a comparison, the average two-year personal loan rate in August 2020 was 9.34% APR, according to the Federal Reserve.
  • What are my other options? Getting a medical loan can seem like your only option, but it’s probably not. Make sure you see what else is available to you.
  • Who is the money paid out to? Will the money be sent to you directly, or to the doctor?
  • What are the monthly payments? Is this something that you can afford in your budget? If not, is there room to make adjustments to your current expenses?
  • How much will I pay in total interest? Ask the lender or use a personal loan calculator to see how much you’ll pay in interest over the life of the loan. Are you comfortable with that number?

Pros and Cons of Medical Loans

Here are some quick highlights to help you see whether a medical loan might be right for you:

Pros

  • No collateral needed
  • Can often get the funds you need quickly
  • Wide range of uses, including for elective and cosmetic procedures

Cons

  • Can be very expensive compared to alternatives
  • May require good to excellent credit

Alternatives to Medical Loans

Paying for healthcare often seems like a puzzle, and medical loans are only one possible piece. Here are some other things to consider first before jumping to the most expensive option:

Hire a Medical Billing Advocate

You practically need to be an expert to understand the medical billing and payment system in the U.S. today. If you’re not an expert in this area—and most of us, in fact, are not—you might consider hiring a medical billing advocate.

The services that these businesses offer may vary, but generally, it’s like hiring a personal assistant for your medical bills. They can go through your bills line-by-line to search out billing errors (spoiler alert: they’re surprisingly common, and can be horribly expensive), negotiate payment plans or reduced charges, among other services.

Better yet, many medical billing advocates only charge you a percentage of the savings they’re able to get for you. Still others charge on an hourly basis, but either way, it can be well worth your time, sanity and money to hire someone to help you.

Set Up a Payment Plan With the Doctor or Hospital

When you get a doctor’s bill, often it’ll say “due in full” on it. But here’s the kicker: That’s not always the case. But to find out the true due date, you’ll need to contact the billing department. Most healthcare providers are actually quite willing to work with you on setting up a payment plan, especially for healthcare that’s not optional.

This is usually a far better route to go than simply signing up for a medical loan right off the bat, because healthcare providers often provide these payment plans at a low interest rate, or even interest-free. Unlike the auto industry, for example, they’re generally in the business of providing healthcare and that’s what they want to get paid for—not spendy finance plans.

Get a Medical Credit Card

If your doctor’s office isn’t willing to work with you on a payment plan and you really do need to finance your healthcare, another option is a medical credit card. These are special credit cards that can only be used with certain healthcare providers, so make sure your doctor’s office accepts them before you sign up. CareCredit is one popular option, for example.

Medical credit cards are handy because you can use them for ongoing costs, such as therapy or frequent treatments like allergy shots. But again, they tend to have APRs between 4.99% and 35.99%, making them more expensive than many loans.

You also can keep an eye out for zero-financing promotional deals. These are quite common, but unlike true 0% APR credit cards, they’re often “deferred interest” cards.

That means that if you don’t pay the bill off entirely by the end of the promotional period, you’ll have to pay all of the interest you thought you were avoiding, so in reality you don’t get any savings at all. It’s a sneaky tactic, so make sure you’re on the lookout for it and don’t take on any more debt than you can pay off by the end of the deferred interest period.

Seek Out Financial Assistance Through the Hospital or a Charity

Finally, there are many places that offer assistance with paying your medical bills. Many larger healthcare providers like hospitals and medical networks have pots of money that are essentially scholarships to pay for healthcare for people in need. Check with your doctor’s office to see if they have any such financial assistance programs.

There are also many charities at national, state and local levels that can help you pay your medical bills if you’re in need. For example, the HealthWell Foundation and the Patient Access Network are two nationwide charities that help with a range of bills. Many charities offer help for any and all medical bills if you qualify. Others are specific to certain diseases such as cancer or autoimmune diseases, or focus on children or people in certain professions.

Don’t count this resource out. It might take a bit of time and Google sleuthing on your part to find these charities, but if you qualify, these are often your best option because it’s free money. The money is there to help you, after all, so make sure you take advantage of it.

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Caldwell Housing Authority to address affordable housing shortage with RV park

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If all goes well with the Canyon County Planning and Zoning Commission in March, 219 RV spaces will be added to the Farmway Village property in Caldwell.

CALDWELL, Idaho — Editor’s Note: This article was originally published by The Idaho Press.

Canyon County is facing a shortage of affordable and available housing. The county of 230,000 people lacks more than 4,000 affordable units for low-income residents.

Mike Dittenber, head of the Caldwell Housing Authority, fields about 10 calls each week from people asking if they can park their RVs on the Farmway Village property, the agency’s rural housing complex.

“We get calls from people who say, ‘I live in an RV, and I am not sure if the police are going to cite me for trespassing. Can I park my RV at your place?'” Dittenber said. 

Unfortunately, he said, he has to say no, because he doesn’t have the proper permitting.

But he’s looking into ways to change that.

“I think the next wave of caring for people who don’t have housing is to provide an affordable RV space,” Dittenber said.

If all goes well with the Canyon County Planning and Zoning Commission in March, Dittenber will add 219 RV spaces at the Farmway Village property in Caldwell.

Walking through Farmway Village Wednesday morning, Dittenber explained that he came up with the idea for an RV park about 10 years ago because he often sees RVs parked in abandoned store parking lots, sometimes in city and county parks and on the side of the road.

Zoe Ann Olson, executive director of the Intermountain Fair Housing Council, said the council is seeing more people than usual being displaced from their housing rentals and choosing to live in something like an RV.

“It is not ideal to have people live in RVs, but it is such a desperate need right now for people to have places to live that they’ll take what they can get,” Olson said.

The Caldwell Housing Authority is in a good position to work on the RV park because it has a sewer line running from the city of Caldwell to its facility. 

The housing authority’s plan is to provide showers and restrooms for the RV park residents and hookups for their vehicles at a cost.

Dittenber said RV parks in Caldwell or Nampa often have strict requirements for what the vehicle looks like, and they require inspections.

“If you believe that everybody deserves housing, then you have to overlook things that prevent people from having housing,” Dittenber said, explaining that sometimes for the RV park the housing authority might do inspections, but it wouldn’t require specific years or makes of vehicles. He also said it may be necessary to overlook things such as bad credit, low income and a poor rental history with tenants.

Dittenber said the RV park tenants would not be required to have a short-term lease and could stay as long as they needed and the housing authority would work with them if they needed work or amenities for their vehicles.

AFFORDABLE HOUSING SHORTAGE

Canyon County has a deficit of 4,325 affordable and available homes for the renters with the lowest incomes, or renters who make less than 30% of the median family income, according to the National Low Income Housing Coalition

The national coalition found the county only has 26 available and affordable units for each 100 renters with incomes under $33,754, the median income.

“It is incredibly apparent in Canyon County that it is very difficult for people with moderate to low income to find a place to live,” said Kendra Knighten, policy associate with the Idaho Center for Fiscal Policy.

The fair market rent for a modest two-bedroom home in Canyon County is $941, according to the National Low Income Housing Coalition. In order to afford this rent without experiencing housing cost-burden, a renter would need to work full time, 40 hours, at $18.10, Knighten wrote in an email to the Idaho Press. The average renter wage in Canyon County is $12.12, meaning the average renter has to work 60 hours each week to afford a modest two-bedroom home. A renter earning minimum wage would have to work 100 hours a week to afford a modest two-bedroom home in Canyon County.

Nearly half, 46%, of the renters in Canyon County are categorized as households with a cost-burden, meaning the household spends more than 30% of its income on housing costs, according to the Department of Housing and Urban Development.

Olson said the Intermountain Fair Housing Council has also seen an increase in calls from struggling renters in Canyon County. She said renters are struggling there because their wages no longer support them with the cost of rentals in the county.

“The need (for affordable housing) has outgrown what exists in Canyon County, and people are cost-burdened,” Olson said.

For Dittenber, the bottom line is that everybody deserves housing, and he is willing to do what he can to make that a reality for Canyon County residents. 

His proposed RV park requires a conditional use permit that would allow the park to be built on the land zoned for agricultural use. Dittenber said he will have a meeting with Planning and Zoning in March. He hopes to break ground in May 2021.

Rachel Spacek is the Latino Affairs and Canyon County reporter for the Idaho Press. You can reach her at rspacek@idahopress.com. Follow her on twitter @RachelSpacek.


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3 mortgage refinancing options for those with bad credit

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Does a low score mean limited options? (iStock)

Record-low interest rates are dominating the news cycle and homeowners, in particular, are jumping to refinance. Data from the Mortgage Bankers Association puts current refinance activity at 98% higher this year than last year, even amid a global pandemic.

Those with low credit shouldn’t skip rate shopping either as there are still options available in today’s low-rate environment — even for those with the thinnest credit profiles.

Mortgage rates vary by lender. Many non-traditional lenders take other factors into consideration outside of credit score, like earning potential and steady work history. While some of these lenders do advertise their qualification criteria, many borrowers may not happen upon them unless they actively shop for refinance rates and offers.

These days, borrowers can quickly explore their mortgage refinance options by visiting Credible, which allows loan seekers to compare both rates and lenders in one place.

1. Look at FHA loans

FHA loans aren’t just for first-time buyers with small down payments. The benefit to doing an FHA refinance is that this option, backed by the Federal Housing Administration, does consider borrowers with sub-600 credit scores who hold less than 20% equity in the home. In fact, only those with less than 20% are eligible for an FHA refinance.

There’s even better news for those with existing FHA loans. With the newer FHA Streamline Refinance product, borrowers can refinance without an appraisal and with lower out-of-pocket costs, saving both time and money.

HOW TO REFINANCE YOUR MORTGAGE

2. Explore VA loans (if you qualify)

Veterans receive many benefits for their service to our country, and one of those is access to mortgage loans backed by the government via the Veterans Administration (VA). Not only are these loans offered at some of the lowest interest rates available, but they also benefit current and past service members regardless of their credit.

Those with current VA loans can also consider refinancing through the VA with the Interest Rate Reduction Refinance Loan program. The IRRRL program is similar to the FHA Streamline Refinance product in that it does not require hefty out-of-pocket closing costs or an appraisal.

If you’re interested in finding the lowest interest rates around, however, you should consider using a multi-lender marketplace like Credible. Credible allows you to compare rates and lenders to ensure you find the best deal.

HOW TO GET THE LOWEST MORTGAGE REFINANCE RATES

3. Opt for cash-out refinance

A cash-out refinance may make the most sense for those with low credit due to a large amount of high-interest debt. Leveraging a cash-out refinance turns home equity into a liquid asset, which borrowers can then use to pay off outstanding debts. Additionally, refinancing to a lower interest rate will save money on the repayment. With current credit card interest rates above 17%, and cash-out refinance rates at 3.194% APR for a 30-year fixed option, this refinance option makes financial sense for those battling to get out from under their debt.

You can visit Credible to get pre-qualified for such a loan and to shop around for loan options among different mortgage lenders. By providing some basic information, you can find out if approval for a loan is likely and can see what rate you’d pay so you can determine if a mortgage refinance loan is affordable.

IS NOW A GOOD TIME TO REFINANCE YOUR MORTGAGE?

What are today’s mortgage rates?

It’s important when shopping for a mortgage refinance to keep an eye on interest rate changes week to week as even a small increase adds up to thousands saved on interest. Again, Credible is a great place to shop. You can compare rates and complete the entire mortgage refinance application process online. Find your rate today.

HOW REFINANCING YOUR MORTGAGE CAN PUT MONEY BACK IN YOUR POCKET

As of the time of writing, (the week November 19th) the current interest rates are:

  • 30-year fixed-rate refinance average: 2.75%.

In the month prior (Week of October 19th), the average 30-year fixed-rate refinance was much higher at 3.16%.

To illustrate the difference, let’s look at the numbers. A consumer refinances a $300,000 loan at 3.2% in October pays over $167,000 in lifetime interest. Another consumer who waits a month and refinances $300,000 at a slightly lower rate of 2.8% percent will pay just $143,000 in interest over the life of the loan.

The bottom line

Don’t let a bad credit score keep you away from the significant savings to be had with today’s low interest rates. While lower credit may not qualify you for the best rates available, depending on when you refinanced and your credit score at the time, refinancing now could still be a big financial win.

To start, investigate refinance options by shopping with multiple lenders to see potential rates, and then input those figures into a mortgage refinance calculator to visualize savings.

Finding the best mortgage refinance rates takes time. You’ll need to compare rates from multiple lenders. Credible allows you to compare multiple lenders to ensure you meet your personal finance goals. Find out how much you could save on your loan amount by refinancing now.

HOW TO FIND THE BEST MORTGAGE RATES AND FASTEST CLOSINGS

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Can I Cancel My Full Coverage Car Insurance?

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While you’re financing a vehicle, you must maintain full coverage auto insurance – it’s not required by your state, but by your lender. If you don’t have a loan, you still need to meet your state’s minimum insurance requirements to legally drive your car on the road. Here’s what you need to know about full coverage insurance, and your choice in the matter.

Auto Loans and Full Coverage Car Insurance

Financing a vehicle means you borrow money from a lender, and then you pay them back in installments. Until you completely pay off the auto loan, the lender has ownership rights to the car. They’re listed on the vehicle’s title as a “lienholder,” and it gives them rights to repossess it if you stop paying or break the loan contract.

One of the requirements of an auto loan contract is that you have full coverage car insurance until you pay off the vehicle. Since the car is technically the lender’s, they can, and do, require that the vehicle is covered to the fullest extent.

If you cancel your full coverage auto insurance while you’re financing, you’re breaking terms of your loan contract. The insurance company generally contacts your lienholder right away and lets them know that the insurance coverage has lapsed.

Your lender can then put what’s called “force-placed” coverage, and add the cost of it to your monthly loan payment. It’s typically more expensive than if you were to choose the insurance for yourself, since the lender isn’t going to shop for the cheapest rates out there – you’re the one footing the bill – because they just want the car covered.

If you refuse to pay for the force-placed coverage, or you can’t afford it, then the lender hires a recovery company to repossess your vehicle. Your other option is to reinstate your previous full coverage that you canceled, or find another insurance plan that meets your lender’s requirements. Contact your lender to see what their insurance requirements are and what you need to do to remove force-placed coverage.

Types of Auto Insurance Coverage

If you’re not financing, then you can simply opt for personal liability and property damage (PLPD) coverage if you choose. This is usually the most basic level of insurance coverage offered by insurance companies, and it’s required to carry this coverage to drive your car on the road in nearly every state.

Can I Cancel My Full Coverage Auto Insurance?Full coverage is defined as a combination of comprehensive, collision, and liability insurance.

  • Comprehensive – Can cover damage from “perils” such as fire, theft, vandalism, or other single accidents not involving another driver, and carries a deductible.
  • Collision – Covers your vehicle in the event of an accident with another driver, regardless of who’s at fault, and carries a deductible.
  • Liability – Covers bodily injury and property damage if you’re in an accident and you’re at fault. This is the most basic level coverage that’s required in nearly every state.

The consequences of not carrying any sort of auto insurance on your car are usually hefty fines, and possibly other serious long-lasting repercussions. Not having auto insurance could lead to a misdemeanor or even a suspension of your license depending on your home state.

Check with your state’s minimum car insurance requirements so you can be sure that your insurance plan is up to snuff.

Car Insurance Too Expensive? Consider a Different Car!

The price of your auto insurance is also dependent on what vehicle you’re driving. Newer cars are usually more expensive to insure because they have more bells and whistles that are costly to insure and fix.

Used vehicles are typically less expensive, but it also depends on the make and model. Some cars are more desirable than others, which can make some vehicles a higher risk for theft. Your credit score can even be a factor in your auto insurance costs in many states.

If your car is too expensive to insure, then consider getting another vehicle. Sometimes, though, getting into an auto loan can be hard if your credit score isn’t the best. Instead of searching all over town for dealerships that can work with your credit, let us help at Auto Credit Express.

We’ve produced a nationwide network of dealers that are teamed up with bad credit car lenders, so let us look for a dealership for you in your local area. Fill out our free auto loan request form to begin the search for your next vehicle.

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