How to Get a Medical Loan with Bad Credit in India

Medical emergencies can hit at any time and are financially draining. It’s even more challenging when you have bad credit. However, getting a medical emergency loan with bad credit is not impossible.

The Financial Burden of Medical Expenses

Imagine you’re suddenly faced with a big medical bill. It could be for emergency surgery, ongoing treatment for a chronic condition, or an unexpected hospitalization. According to a survey by National Sample Survey Office (NSSO), more than 80% of India’s population doesn’t have health insurance, and out-of-pocket expenses for medical treatment are the leading cause of debt in the country.

Now add the complexity of having a bad credit score. In India, the average credit score (CIBIL score) is around 720 but many have scores below 600 which is considered poor. Lenders see poor credit as a risk factor and it becomes harder for individuals to get loans. Medical debt can snowball and can stress you out and even jeopardize your health if treatments are delayed or foregone.

The Double Whammy of Bad Credit and Medical Emergency

Consider Sunita, a single mother of two who was already struggling to make ends meet. Sunita had a CIBIL score of 580 due to some past financial mistakes including late payments on her credit card and a defaulted personal loan. When her youngest child needed urgent surgery, the medical bills were ₹3,00,000. With her bad credit, traditional lenders rejected her, and she was in a bad situation.

The emotional cost is huge. The constant worry about financial instability and the health of a loved one can lead to anxiety, depression, and even physical health problems. In Sunita’s case, she was having sleepless nights thinking about how she would pay for her child’s surgery and manage her monthly expenses.

Practical Steps to Get a Medical Loan in India with Bad Credit

1. Know Your Credit Situation

Before applying for a medical loan, get your credit report from credit bureaus like CIBIL, Equifax, Experian, and CRIF High Mark. This will help you know your credit standing and identify any errors that might be affecting your score. Correcting errors can sometimes improve your score slightly which can make a difference.

2. Look for Specialized Medical Loan Providers

Some lenders in India provide medical loans to individuals with bad credit. These lenders have more relaxed criteria and consider factors beyond your credit score like your income and employment history. For example, Bajaj Finserv and Tata Capital offer personal loans for medical expenses with relatively softer credit requirements. Compare medical loan interest rates to get the best deal.

3. Medical Credit Cards

Medical credit cards like Bajaj Finserv Health EMI Network Card are for medical expenses only. They have no-cost EMI options and are a lifesaver. But make sure you read the terms and conditions as failing to pay the balance within the promotional period can attract high interest rates.

4. Co-signer

If you have a family member or friend with good credit who is willing to co-sign your loan, it can increase your chances of approval and may get you better terms. A co-signer agrees to be responsible for the loan if you default which reduces the lender’s risk.

5. Nonprofit Organizations and Charities

Several nonprofit organizations and charities offer financial help for medical expenses. Organizations like Indian Red Cross Society, Rotary Club and Lions Club provide grants and financial assistance to eligible individuals.
6. Negotiate with Hospitals

Don’t underestimate the power of negotiation. Talk to your hospital about your financial situation. Many hospitals and clinics have payment plans or financial assistance programs for patients who need help. Sometimes they can reduce the bill or set up a payment plan.

7. Peer-to-Peer Lending

Peer-to-peer (P2P) lending platforms like Faircent and LenDenClub can be an option. These platforms connect borrowers directly with individual lenders and often offer better terms than banks. They do consider credit scores but also look into other aspects of your financial profile.

8. Community Resources and Crowdfunding

In today’s digital age, crowdfunding platforms like Milaap and Ketto have become popular for raising money for medical expenses. Share your story and reach out to your community and you can get a lot of help. Also, local community resources like religious organizations or community health centers may have assistance programs.

Conclusion

Getting a medical loan with bad credit in India is tough but not impossible. By understanding your credit, looking into specialized loan options, considering a co-signer, using nonprofit resources and negotiating with hospitals you can find a solution to manage your medical expenses.

Sunita’s story had a happy ending. After exploring her options she found a nonprofit organization that covered a part of her medical bills and she got a medical credit card with a deferred interest period for the remaining balance. This way her financial burden was reduced and she could focus on what mattered the most – her child’s health.

So take the first step and use the resources available to you and you can manage your medical expenses even with bad credit. Getting a medical emergency loan in India can be simpler with the right information and resources so you can get the treatment you or your loved ones need without further hassle.

Understanding the medical loan interest rate and comparing different options will also help in finding the most affordable and manageable solution for your specific situation. Medical loans in India are designed to support those in need, and by following these practical steps, you can find a way to secure the necessary funds even with a poor credit score.