Medical personal loans: what are your options?

Finance Writer · 8 September 2021

In this article:

What is a medical personal loan?

A medical loan is a type of personal loan that can help cover the costs of a surgery or urgent medical expenses when you don’t have enough money in savings. Sometimes, the costs aren’t covered by the public health system and/or private health insurance. Taking out a personal loan to cover your medical expenses could help you receive the treatment when it’s needed, and pay for any other associated costs.

What can a medical loan be used for?

A medical loan can typically be used towards:

  • dental procedures
  • specialist appointments
  • post-accident or injury surgery
  • medicine and medical equipment
  • IVF treatment
  • elective cosmetic surgeries, such as liposuction and laser eye surgery

While the public health system or private healthcare insurance may cover some of these expenses, others may not be covered and you may at times find yourself with a gap to pay. Potentially, you might even find some lenders provide medical personal loans that include travel costs for overseas procedures.

What to consider before applying for a medical loan

Taking out a medical loan to pay for emergency dental surgery is one thing, but borrowing thousands of dollars for elective cosmetic surgery is another entirely. Borrowing money comes with risks and costs you more than the actual amount borrowed. So, it’s important to consider whether you really need to borrow money now, or if you can wait a bit longer and build an emergency fund first. You may also be eligible to consider options such as a No Interest Loans Scheme (NILS) loan.

There are a few specific factors you may want to consider when choosing a medical personal loan for your needs.

Interest rate

Interest rates are generally offered as fixed or variable. There are pros and cons to both, depending on your specific needs. When comparing personal loans, check the comparison rate, as this should also include the cost of fees. Additionally, be mindful that the interest rate that you are charged will typically depend on your personal circumstances, including your income, expenses and credit score.

Secured or unsecured

You may be able to secure your medical loan against an asset like your house or car. As you’re offering your asset as security for the loan, lenders tend to offer a more competitive interest rate. However, be mindful that if you default on your repayments, you risk losing the secured asset.

Loan term

Personal loan terms generally range between one and seven years. The total amount of interest you’ll pay, and therefore the total cost of your loan, will depend on how long your loan term is.

Fees and charges

Interest isn’t the only way lenders make money. They can also charge a fair bit in fees. Take into account any upfront application fees, monthly service fees and missed payment fees, as well as potential break fees, should you decide to pay off the loan early.


Medical personal loans are subject to credit approval, so it’s important to make sure you qualify before applying. In addition to essentials like being an Australian citizen or resident aged over 18, you’ll need to meet the lender’s income requirements. It’s a good idea to check your credit score and see if there are any steps you can take to help improve it if needed. How good you look on paper could affect the interest rate and maximum loan amount offered, or even if you are approved for a loan with a lender at all.

Can you get a medical loan with bad credit?

According to Moneysmart, lenders will use your credit score to decide whether to lend you money, and a low score may affect your ability to get a loan or credit. Potentially, a low score could restrict your access to favourable interest rates, terms and conditions. There are specific ‘bad credit loans’ available, but these often come with considerably higher interest rates. Separately, payday loans might seem to offer fast access to cash, but have very high fees attached that aren’t always obvious upfront to borrowers.

It could be wise to consider alternative low-cost finance options before applying for a medical loan. If you are experiencing financial difficulty or receive Centrelink payments, you may have other borrowing options available to you, such as the Pension Loans Scheme or a NILS loan, if you meet eligibility requirements. For free financial advice, you can contact the National Debt Helpline on 1800 007 007.

How to get a personal loan for medical expenses

The more research you do, the better you’ll understand which loan (if any) is right for you. You could start with our personal loan repayment calculator to determine your ability to comfortably meet repayments, then you could compare personal loans with Canstar to determine if one meets your needs.

You may need to nominate what the money will be used for on the application form; however, medical expenses are often listed as an option by lenders.


Cover image source: Andrei R/

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This content was reviewed by Sub Editor Jacqueline Belesky and Finance and Lifestyle Editor Shay Waraker as part of our fact-checking process.

Kelly Stone is one of Canstar's experienced finance writers, covering car finance, personal loans, insurance, superannuation and more. She has more more than 10 years' experience in professional services writing.

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