Many people hope that they can get help through loans to pay other debts. Some loans allow you to do this but medical loans are not one of them.
Purpose for Medical Loans
Medical loans are not what you think they are. The true term is actually medical practice loan. Medical practice loans are specific programs for doctors to either expand their practice, purchase a practice, or build a practice.
Any Loans for Debts
Lenders are not fans of loaning money to pay off debts. They will, however, under the right circumstances. If someone wants money from a loan fairly fast (within 30 days), an equity line of credit or a business line of credit are the best options. See our articles on each and their particulars in Business Lines of Credit and Home Equity Lines of Credit.
Most lenders shy from giving loans because a loan is a new debt. Using new debt to pay off old debt, specifically personal debts, is not something a lender wants to do because the risk is much higher. Take a look at people who use payday loans or title loans for example of the bad that can happen. They get into a vicious cycle of borrowing money on a paycheck they have not earned yet. By the time they have paid down the loan, they are short again the next week.
The same goes with getting a loan for a down payment on anything. For example, most people think they can borrow money from a lending institution for a down payment on a car. You cannot because technically, then you have borrowed 100% of the money for a car, and there is no out of pocket risk on your side. This is a big risk to lenders because there is nothing to stop someone from walking away from the car other than a hit on his credit.
Medical healthcare costs are personal debt. Unless you are a qualified borrower and have the credit worthiness to get a personal loan to pay down high interest medical costs, you will probably not find a better rate and term.
Medical Practice Loans for the Win
Medical practice loans have a different set of qualifying parameters that extends additional credit to professionals like dentists or pediatricians because their profession nearly guarantees revenue that can be used to repay the loan. Not to mention, on the whole, medical professionals with outside practices (not in or attached to nearby hospitals) tend to be more conservative as individuals and make smarter decisions with their money.
As always, remember to talk to your financial advisor or CPA for professional guidance. But, ultimately, there has never been an instance of using a medical practice loan to pay healthcare debts. If you are looking for a medical practice loan, start with Magilla Loans. Magilla is free and anonymous, and we have dozens of lenders who focus on medical practice loans.