A medical crisis can turn your life upside down. And once the dust settles, the bills start rolling in — often before you’ve had a chance to catch your breath. The financial fallout from an unexpected hospitalization or serious illness can feel just as overwhelming as the health scare itself. Between medical bills, lost wages and the day-to-day cost of recovery, it’s a lot to manage at once. But there are steps you can take to get back on solid ground. The key is knowing where to start and what tools can help you along the way.
Medical financial recovery plan
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Contact your provider first
This sounds simple but many people skip it. Before you do anything else, pick up the phone and call your hospital or provider’s billing department. Ask directly whether they offer hardship programs, charity care or payment plan extensions. Many providers, especially nonprofit hospitals, are required to offer financial assistance but they won’t volunteer that information. Negotiating a longer repayment window or a reduced balance can buy you breathing room while you sort out your next steps.
Consider a medical loan (carefully)
When a bill is too large to pay out of pocket and a payment plan isn’t enough, a personal loan specifically used for medical expenses may be worth considering. These work the same way as any personal loan. You borrow a lump sum, then repay it in fixed monthly installments over a set term, typically at a lower interest rate than a credit card. The upside is that there are no surprises because you know exactly what you owe each month and when you’ll be done paying it off.
That said, taking on new debt while you’re already stretched thin is a real risk. Before you apply, make sure you understand the full cost of the loan — not just the monthly payment, but the APR, any origination fees and what happens if you miss a payment. You want to make your debt more manageable, not dig yourself in deeper.
LightStream’s personal loans can be used for medical expenses, such as procedures and dental work. It’s a solid option if you want to avoid extra fees as it doesn’t charge origination fees, late fees or early payoff penalties. APRs are among the lowest rates we’ve seen from any lender and you can score a lower rate by signing up for autopay.
Upstart’s personal loans for medical expenses include emergency treatments and already existing medical debt. This lender is worth considering if your credit score is low or your credit history is thin. It takes a broader view of your financial picture, which makes it a more accessible option if you haven’t had enough time to build up a strong credit profile.
LightStream Personal Loans
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Annual Percentage Rate (APR)
6.49% – 24.89%* APR with AutoPay
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Loan purpose
Debt consolidation, home improvement, auto financing, medical expenses, and others
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Loan amounts
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Terms
24 to 240 months* dependent on loan purpose
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Credit needed
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Origination fee
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Early payoff penalty
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Late fee
Terms apply. *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.
Pros
- Same-day funding available through ACH or wire transfer (conditions apply)
- Loan amounts up to $100,000
- No origination fees, no early payoff fees, no late fees
- LightStream plants a tree for every loan
Cons
- Requires several years of credit history
- No option to pay your creditors directly
- Not available for student loans or business loans
- No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)
Upstart Personal Loans
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Annual percentage rate (APR)
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Loan amounts
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Terms
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Credit needed
300 (but may also accept applicants with no credit history)
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Origination fee
0% to 12% of the target amount
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Early payoff penalty
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Late fee
5% of the last amount due or $15, whichever is greater
Pros
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
Cons
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
Look into a debt relief plan
If your medical bills have already gone to collections or you’re juggling multiple debts and feeling buried, a debt relief plan is another route. Debt settlement involves negotiating with creditors to accept less than what you owe.
This approach can reduce what you’re paying each month but it comes with trade-offs. Debt settlement will typically be marked as “settled” rather than “paid in full,” which can hurt your credit score. Some programs also charge fees based on the total amount enrolled, so it’s worth doing your homework before you commit.
Don’t be afraid to ask for help
There’s no shame in leaning on outside resources during a health crisis and more help exists than most people know about. Hospital charity care programs, nonprofit organizations and state-level assistance programs can all help cover costs, sometimes significantly. If you have health insurance, it’s also worth reviewing your explanation of benefits carefully to make sure you were billed correctly. Medical billing errors are quite common and disputing one could reduce what you owe without any additional debt or paperwork.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.