It usually strikes when it is least expected. Late-night calls, a fall at home, a test result that admits you by morning. And immediately after comes the second and arguably more pressing question- how to meet the expenses that arise.
For most of the Indian families, siphoning off some money from their savings to pay a medical bill is much worse than the malaise itself. And an instant loan can take the pressure off as it settles the amount due, leaving their hard-earned savings untouched. For years, this has been the reason Indians have saved, to keep their children’s fees due and their home deposits in order; this is where a sudden hospital bill strikes hardest.
So can they help you manage an urgent medical expense without draining your savings? In most cases, yes- and here’s how.
Why do medical bills weigh the heaviest?
Healthcare has become prohibitively expensive in recent years, with rates rising by roughly 13-14% a year, three times faster than the rate of inflation, according to most industry reports. A surgery that perhaps cost Rs. 2 lakh a couple of years ago has now gone up to 3 lakh and beyond.
Why is emptying your coffers to pay for treatment not always advisable?
While it is understandable to want to use your own money in a situation like this, remember that emergency savings serve a purpose beyond a single emergency.
Emptying your emergency fund may see you exposed to an entirely different set of circumstances in the future, especially since recurring expenses and medical expenditures often come hand in hand. Similarly, long-term savings and investment funds are rendered useless if one were to dip into them too soon, incurring losses on the maturity amount.
A loan for medical treatment allows you to amortise the weight of the bill against a few months of your regular monthly expenditure, and prevents one large shock from derailing your entire financial planning for the long term.
What exactly is a medical emergency loan?
A medical loan is a personal loan that is used to finance a health-related cause- hospitalisation, treatment, surgeries, and medications. These are unsecured personal loans, which means one does not need to put up collateral or secure the loan against one’s assets. One can choose to use a medical loan to pay for the entire hospital bill or just a part of it, depending on one’s needs and how much one can afford to repay in installments.
Since a medical loan is a personal loan, one can use the funds for a wide variety of purposes, and not just the main cause of the hospitalisation. This is especially crucial because the total expenditure is a combined effort of dozens of smaller bills, which add up to the total amount.
How does a digital instant loan for medical emergencies work?
Time is of the essence during an emergency. This is where an instant loan, particularly on a digital platform, helps inordinately. One can simply log into an instant loan app while at the hospital to manage this aspect of the emergency without having to visit any branch.
When applying for an instant digital loan, the process involves first checking one’s eligibility and submitting documents. One can use an instant loan app for medical emergencies to apply by submitting bank details and PAN/Aadhaar card details for KYC verification.
This process guides the borrower to focus on managing the medical emergency, while the rest is handled with minimal time investment on their part. It also ensures the borrower does not have to sell off or liquidate long-term savings at a loss to be able to meet the immediate expenses, as it is an instant medical emergency loan.
What can one use a medical loan for?
A medical emergency rarely comes as a single expense. A medical loan can be utilised for all expenditures relating to one’s health and treatment, including:
- Deposits in the hospital and for surgeries,
- Diagnostic tests and consultations
- Medicine and treatment,
- The sum of a medical bill that insurance does not cover,
- Expenses incurred for travel and accommodation if hospitalisation is in another city,
- The expenditures relating to the time spent recovering.
The truth about the cost of a medical loan
A medical loan is a financial obligation, and one should be prudent about taking one. It is important to assess one’s own capability to handle the additional expenditure before taking a loan for a medical emergency. The amount offered, tenure, rate of interest, and processing fees- all of this depends on one’s profile, and a reliable lender like InstaMoney will be transparent about the details, offering a Key Fact Statement about the terms and total cost of the loan.
Processing fees vary across lenders and are a realistic cost to factor in while considering a personal loan for medical treatment.
How to make the most of a medical loan during an emergency
There are some important practices to keep in mind while considering a medical loan for an emergency. Borrow only the amount one requires, and not the maximum they can repay. Take a look at the EMIs and choose an option where the repayment amount is lower if one has the tenure to take on a longer EMI. Insurance should be prioritized over a personal loan, and one should consider a medical loan as the secondary option for the amount that insurance does not cover.
Savings versus a loan- which is the best option?
There is never one single way of handling a medical emergency. In most situations, it is best to utilise a combination of both. If there are sufficient savings to cover the expenses, especially if the bill is on the lower end, it would be wise to avoid a medical loan and utilise the emergency fund since it will be of far better use in the long run. At the same time, if the bill runs on the higher end or if there are savings that one cannot risk losing, a medical loan can be considered as an option to save the emergency fund for later use.
Most families manage a combination of both, borrowing only the amount they need to avoid a heavier EMI while also using their savings for a part of the bill.
In most cases, a high medical bill should not have to come at the cost of one’s family’s financial stability. Medical emergency loans in India exist for this very reason- to provide treatment that ensures an immediate recovery, with a manageable repayment schedule that allows one to save their emergency fund for other pressing needs that cannot wait.
InstaMoney is a digital lending platform that connects borrowers to loans that are disbursed through NBFC lending partners, and offers a completely digital experience in case of an emergency where time is of the essence. If one finds themselves in a medical emergency, one can apply for an instant loan for medical treatment and check one’s eligibility to see how one can manage.
