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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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Bad Credit

Checking Your Own Credit Report Is Vital | Fox Rothschild LLP

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These are difficult times.  Some parts of the economy have responded well to the pandemic crisis.  Others, especially those in the travel, leisure, and entertainment industries have experienced enormous financial challenges.  Sadly, this sometimes prompts desperate measures.  You should not become an unwary victim of desperate measures.  You are the best person to protect yourself from that.

Yesterday, a local attorney in suburban Philadelphia pleaded guilty to falsifying credit applications using the names and personal financial data of his wife and mother-in-law to tap an estimated $85,000 of credit, which he spent for his own amusement.  He had recently been convicted of taking roughly $90,000 in client money for similar purposes.  He will be sentenced for these crimes next month.  The crimes go back several years.  They are not related to the current economic crisis, thereby proving once again that crime can happen in good times.  However, desperate times (and many Americans are in desperate times) often trigger people to resort to desperate measures.  History has taught us that many times, the first draw on another person’s funds or credit is accompanied by the desire, indeed the expectation, that the taker will “make good” on the borrow.

The second lesson here is that certain vital information like birthdates, social security numbers, even telephone numbers and credit card data can permit theft as easily as the proverbial unlocked door.  In this case, the lawyer acted as his spouse and mother-in-law to open new accounts they never knew about at the time.  Yes, they are victims, and probably will secure release from these debts.  But, the stain of bad credit travels faster than a good reputation and it makes future borrowing a steep uphill climb.

A few years ago the judicial system embarked on a program to demand that documents filed in court be cleansed of data that could be used to steal.  The program is reasonably effective, although many attorneys forget to obliterate things like full account statements and social security numbers from documents filed with the court.  You can help with that process as well by taking action to remove/redact that data before you hand it to your attorney.  Realize that some of those digits need to be preserved because you may have four different accounts with a bank or a brokerage and they need to be distinguished.  Nevertheless, with rare exceptions, lawyers, their staff, judicial officers and the like do not need all of the numbers.  On those rare occasions when they are required, consider providing the information in separate communications.

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Bad Credit Credit Cards – RBI wants you to memorise all your debit and credit card numbers — Amazon, Zomato, Netflix and others argue this will make online payments more tedious | Fintech Zoom

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Bad Credit Credit Cards – RBI wants you to memorise all your debit and credit card numbers — Amazon, Zomato, Netflix and others argue this will make online payments more tedious

  • India’s apex banking institution, the Reserve Bank of India (RBI), has issued new master directions that will stop online merchants, payment aggregators and e-commerce websites from storing your debit and credit details.
  • This means that you will either have to memorise your card details or keep your card handy every time you want to shop online, renew your subscription or make an in-app purchase.
  • The new guidelines are set to kick in from July, this year.

A debit or credit card number is 16 digits, and not everyone has the bandwidth to memorise them in their entirety. Especially, since most people use more than one card. But, according to the Reserve Bank of India’s (RBI) new rules, you may not have a choice. The only other alternative is to take your cards wherever you go.

What customers complained to the RBI about in 2019-20BI India

India’s apex banking institution has issued
new guidelines dictating that online merchants, e-commerce websites and payment aggregators — this includes everyone from Amazon to Flipkart to Google Pay to PayTM to Netflix — will no longer be allowed to store card details of a customer online.

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According to the RBI’s circular, these new guidelines will come into effect starting July 2021.

This means that rather than just having to enter your CVV to make a payment, you’ll have to enter all your card details — name, card number and expiry date — from scratch every time you want to make an online payment.

One would think that in the push for ‘Digital India’, these new rules would hamper the process of creating a cashless country. But, India’s central bank argues that the point of not letting third parties store card details is to mitigate the additional risk of fraud and financial theft.

RBI wants you to memorise all your debit and credit card numbers — Amazon, Zomato, Netflix and others argue this will make online payments more tedious
Concerns relating to digital transactionsBI India

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Not everyone agrees with the RBI
The Indian IT lobby NASSCOM already expressed its concerns against such a step back in January. “Without card data, merchants will not be able to perform basic functions such as resolution of consumer complaints or disputes, consumer service and speedy resolution of refunds requests, and will be completely dependent upon pay aggregators and banks to provide the same,” it said in
letter to the RBI.

Instead, NASSCOM proposes that the RBI could develop a framework to store card data that encompasses security measures, reporting requirements and governance mechanisms as per its requirements.

RBI wants you to memorise all your debit and credit card numbers — Amazon, Zomato, Netflix and others argue this will make online payments more tedious
Most of the complaints against banking services to RBI are against public sector banksBI India

It also argues that the top financial institution has failed to define the full scope of what falls under the umbrella of ‘payment data’ other than ‘customer card and such related data’.

A group of 25 consumer internet companies like Flipkart, Amazon, Netflix, Microsoft and Zomato also wrote to India’s central bank, according to
CNBC-TV18. They argue that these rules would severely hamper the customer’s online payment experience.

Moreover, it would impact fraud risk assessment. Merchants will no longer be able to use any kind of internal tokenisation method to protect card data undermining the RBI’s objective to create a more secure online payments ecosystem.

Regardless of whether the RBI’s new master directions will make payments more secure, it will definitely make things more tedious. Everytime you want to renew your Netflix subscription, shop online, or even make an in-app purchase — you’ll have to manually enter all of your card details. You’ll either have to keep your cards on hand, or memorise the particulars needed to make a transaction.

SEE ALSO:
INTERVIEW: Dassault has an India IT services unit offering defence MSMEs a digital ‘trial room’ where they can test their products to bag more contracts

Indian space startup Pixxel won’t be launching its satellite on February 28

Bad Credit Credit Cards – RBI wants you to memorise all your debit and credit card numbers — Amazon, Zomato, Netflix and others argue this will make online payments more tedious

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Myth-busting bad credit: 3 things to know about your low score : Augusta Free Press

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(© tortoon – stock.adobe.com)

Bad credit, a subprime score, or any number below 669 on the FICO scoring range. There are a lot of ways to talk about your bad credit, but they don’t always get to the facts. You can wind up believing some less-than-true things about it when you tiptoe around the subject.

Luckily, the most common misconceptions are easy to debunk. Here are three of them below:

Myth #1: It’s permanent

No credit score is permanent. That goes for the good ones, too. That’s because your score isn’t an identifying number that sticks with you for a lifetime like most social security numbers. Your score is a dynamic metric of your fluctuating borrowing habits.

Since your habits change throughout the years, so does your score. It reflects the changes in your finances as you go to school, buy a house, and use credit cards.

The good news is you have the power to improve your score, provided you stick with good habits that add positive credit history in your file.

The bad news is changing your score is more like a marathon than a sprint. It takes time to dig yourself out of bad credit.

Myth #2: You can’t borrow with it

One of the biggest myths about bad credit is that you can’t borrow money while you have it. That’s simply not true. While borrowing money may be harder when your score is low, there are still options available.

If you can’t wait to improve your score before you borrow, you may find cash advances, lines of credit, and online installment loans for bad credit if you know where to look.

The rates, terms, and even borrowing amounts differ drastically between these loans for bad credit. To learn more about how they compare, check out this resource page at MoneyKey that breaks down some of this information.

These financial products tend to cost more than traditional bank loans. That’s because many lenders apply higher fees to offset the risk your low score represents.

Myth #3: Paying off a loan will help your score

The day you pay off the last cent you borrow is one to celebrate. You’ve successfully closed your term, avoiding the possibility of any future late fines. It also means you don’t have to make another payment; your cash is yours again now that it isn’t tied up by these bills. Hooray!

Unfortunately, your credit score won’t soar despite all your hard work. Paying off a personal loan may strike outstanding debt from your name, but the account remains in your credit report for up to seven years. During that time, your account info and payment history will continue to affect your score.

This is another reason why you should hurry to adopt good credit habits. If an account shows you always paid on time, it will contribute positively toward your score.

But that means the opposite is true, too. If you handle an account irresponsibly, it may impact your history for as long as it remains in your file.

Bottom line

Get informed — the more you know about your score, the more likely you can make educated decisions that can boost your number. While it may not happen overnight, improving your score is possible.

Story by Rob Teitelman  

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