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Medical emergencies can be financially challenging, and in such situations, obtaining quick funds becomes important. Many financial institutions, including Non-Banking Financial Companies (NBFCs), offer Medical Loans as a specialised form of Personal Loan to assist individuals in coping with unexpected medical expenses.
However, regular Personal Loans from lenders not specifically offering medical emergency loans can also serve the same purpose. This article will explore the features of medical emergency loans, shedding light on the interest rates, eligibility criteria, documentation requirements, and ways to secure funds promptly.
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Why Utilise a Personal Loan for Unexpected Medical Expenses?
Here are some reasons that make Personal Loans the best solution to handle medical expenses.
Immediate Funding:
A Personal Loan is known for its quick processing and minimal documentation requirements, making it an ideal choice for immediate funding requirements during medical emergencies. The absence of extensive paperwork and income-proof requirements expedites the process, ensuring you can access the funds promptly. This is particularly beneficial when time is of the essence in covering medical expenses for yourself or your family members.
Preserving Your Savings:
Medical emergencies can take a toll on your savings and emergency funds. Opting for a Personal Loan allows you to preserve your existing financial reserves. You can protect your savings for long-term financial security by using loan funds to take care of urgent medical requirements. You can preserve the integrity of your emergency fund and still get returns on your investments.
Flexible Repayment:
Personal Loans offer flexibility in terms of selecting loan tenure. With various tenure options available, you can tailor the repayment plan to suit your financial situation. This flexibility lets you select a reasonable repayment time and avoids placing undue burden on your monthly budget. This flexibility is especially helpful since it guarantees you can repay the loan without jeopardising your overall financial security.
Comprehensive Coverage:
A medical emergency loan from reputed lenders provides comprehensive coverage for all aspects of your medical expenses. From hospital bills and doctor fees to diagnostic tests, surgeries, medications, and post-treatment care, the funds obtained through a Personal Loan can be utilised for various medical needs. This versatility makes it a valuable resource for addressing the diverse financial aspects of a medical emergency.
Alternative to Insurance Gaps:
While insurance coverage can be a crucial financial safety net, there are instances where it might fall short or claims delayed. In such situations, a Personal Loan can serve as a bridge to cover the gap and ensure continuous medical treatment. This flexibility makes it a viable alternative to address unexpected shortfalls in insurance coverage, providing peace of mind during challenging times.
Features of Personal Loans for Medical Emergencies:
- Interest Rates: Personal Loan interest rates for medical emergencies typically start at low interest rates. Reputed NBFCs like Hero Fincorp have interest rates starting as low as 12.5% for Personal Loans of up to Rs 3 lakh, making it an affordable option for borrowers.
- No Collateral Required: Lenders do not demand any collateral or security, making Personal Loans for medical treatment accessible to a broader range of applicants.
- Quick Disbursal: Personal Loans usually take 2 working days for disbursal after the submission of the application. However, Hero FinCorp’s instant Personal Loan app provides the best experience by procesing the loan within 48 hours. Meanwhile, pre-approved loans for existing customers are disbursed within seconds of application.
- Minimal Documentation: While medical loan applicants need to submit ID proof, address proof, and income proof, pre-approved Personal Loans for existing customers often bypass the need for fresh documentation, streamlining the process.
- Flexible Repayment Tenure: Personal Loans come with flexible repayment tenures of 1-3 years, providing borrowers with options that suit their financial circumstances.
Eligibility Criteria for Personal Loans for Medical Emergencies:
- Employment Status: Applicants should be either salaried or self-employed, working in private limited companies or public sector undertakings.
- Age Criteria: The minimum age for loan application is 21 years, and the maximum age at the time of loan maturity should be 58 years.
- Income Requirements: A minimum monthly income of Rs 15,000 is generally expected from medical loan applicants.
- Work Experience: Salaried individuals must have a minimum work experience of six months, while self-employed individuals need at least two years of experience in their current business.
Documents Required for Personal Loan for Medical Emergencies:
Salaried Individuals
1. Mandatory Documents:
a. Duly filled loan application form
b. Passport-size coloured photograph
2. Identity Proof:
a. Driving Licence/ Passport/ PAN Card (mandatory)/ Aadhaar card
3. Residence Proof:
a. Driving Licence/ Passport/ Aadhaar Card/ Ration Card/ Utility Bill
4. Residence Ownership Proof:
a. Electricity Bills/ Maintenance Bills/ Property Documents
5. Proof of Income:
a. Last three months’ salary slips
b. Last six months’ bank account statement (salary account)
c. Form 16
6. Job Continuity Proof:
a. Appointment letter from the current employer, Experience certificate from the previous employer
Self Employed Individuals
1. Mandatory Documents:
a. Duly filled loan application form
b. Passport-size coloured photograph
2. Identity Proof:
a. Driving Licence/ Passport/ PAN Card (mandatory)/ Aadhaar card
3. Residence Proof:
a. Driving Licence/ Passport/ Aadhaar Card/ Ration Card/ Utility Bill
4. Office Address Proof:
a. Maintenance Bill/ Utility Bill/ Property Documents/ Rent Agreement
5. Business Existence Proof:
a. Copy of Tax Registration/ Shop Establishment Proof/ Company’s Registration Certificate
6. Proof of Income:
a. Last six months’ bank statement
b. ITR for the last two years
Crafting a Financial Plan for Medical Emergencies:
- Assess Your Medical Expenses: Begin by evaluating the extent of your medical expenses, considering hospital bills, treatment costs, medication expenses, and any potential surgical or operational costs.
- Explore Personal Loan Options: Research various lenders offering Personal Loans for medical emergencies. Compare interest rates, repayment terms, and additional charges to choose the most suitable option.
- Check Your Credit Score: A good credit score enhances your chances of securing a Personal Loan at a lower interest rate. Regularly check and maintain your credit score for favourable borrowing terms.
- Prepare Necessary Documents: Ensure you have all required documents, including ID proof, address proof, income proof, and credit score details, ready for a swift application process.
- Consider Pre-Approved Loans: If you are an existing customer with a good credit profile, explore pre-approved instant Personal Loans for immediate disbursal.
Conclusion
Facing a medical emergency can be tough, but a well-thought-out financial plan can relieve some of the stress. Understanding the features, eligibility criteria, and necessary documentation is crucial when opting for a medical emergency loan. By being proactive and informed, individuals can navigate the financial challenges associated with medical emergencies and secure the necessary funds promptly.
