When a medical emergency strikes out of the blue, putting your own or a loved one’s life at risk can be a distressing situation. Between finding good treatment and availing it on time, arranging for finances can be an added stressor. Although some have medical insurance to cover health emergencies, not all illnesses are covered under insurance. For instance, until July, no Indian insurance company covered COVID-19 under its policy. Even if you had health insurance, treatment for COVID-19 would have been expensive.
In unexpected scenarios such as these, a medical emergency loan can be a lifesaver.
Understanding a Medical Emergency Loan
A medical emergency loan can be thought of as a personal loan for an urgent medical requirement. It is an unsecured loan, which means it does not require you to pledge any collateral to avail it. This loan is sanctioned specifically for medical emergencies and can be used for all purposes. Here are some purposes for which a medical emergency loan can be availed:
- Surgery and hospitalization
- Paying medical bills and for prescription pills
- Emergency procedures
- Medical tourism
- Fertility procedures
- Dental procedures
- Cosmetic surgeries like fillers and facelifts
Most banks and non-banking financial institutions offer personal loans for medical emergencies both online and offline.
Eligibility and Documentation Requirements
To apply for a medical emergency loan, you have to be an Indian citizen between 21-60 years of age, living in India. You will also need to prove employment with a public or private company. If you are self-employed, as a business owner or in some other capacity, you will have to produce proof of income. Requirements may vary from one financial institution to another.
Documents required for a personal loan for medical emergencies are similar to a personal loan. You will need to produce:
- ID proof such as passport, voter’s card, Aadhar card or other acceptable proof
- Address proof
- Proof of income, such as salary slips or business income
- Employment letter/ employer ID/ business documents
- Latest monthly bank statements
Since medical emergency loans are unsecured loans, your credit score will also impact your ability to get funds. A credit score is a measure of your ability to repay loans, usually expressed in a number between 300-900. The higher your score, the better chances of getting a loan. Many banks do sanction emergency medical loans for bad credit scores, though the interest charged may be high. For individuals with a very low credit score, getting a medical loan may be difficult.
How to Apply for a Medical Emergency Loan
Applying for a medical emergency loan is simple. If you are applying at a physical bank location, you will have to fill out an application form for the loan and submit the required documents. Once it is verified, the amount will be deposited in your savings account.
Many banks also allow you to apply for the same online. The procedure is similar – you fill out an online application form, upload scanned copies of documents needed for verification and the loan will be sanctioned once they are all cleared.
Things to Consider
While a personal loan for medical emergency has many advantages, such as no collateral and financial support for non-insured conditions, there are some aspects you must consider:
- Interest rates – Since the loan is unsecured, interest rates may be high. Some financial institutions charge as much as 30% interest per annum.
- Other charges – Like a personal loan, a medical emergency loan may have other charges like processing fees, pre-payment charges, early closure charges, penalties, etc. that you should consider before applying for one.
- Disbursal time – Medical emergency loans can take up to 24 hours to be cleared after being sanctioned. If you are in immediate need of funds, you may have to consider alternatives.
Gold Loans for Emergencies
Many individuals prefer taking gold loans for medical emergencies. If you have gold jewellery, you can pledge them to get an instant gold loan. Taking a loan against gold ornaments can also be a good option if you are looking at emergency medical loans for bad credit or for those who do not have employment proof.
Gold loans also offer other advantages in times of a real crisis –
- Documents required for gold loans are minimal, with only KYC being required
- The amount is disbursed instantly, usually within a few hours after the gold assets are deposited
- Gold loan schemes are affordable, with some of the lowest interest rates
- They offer flexible repayment options and tenure
Rupeek’s gold loans can be convenient, easy, and quick in times of medical emergencies. You can put your gold to use by opting for a gold loan with low-interest rates, zero processing fees, and unique doorstep services. A loan manager will assess and collect gold assets at your doorstep so that you will not have the added hassle of travelling to a physical location during a distressing phase.