During the financial year 2018-19, the healthcare inflation rate stood at 7.14%, which rose from 4.39% in the previous fiscal. Medical treatment costs have increased significantly over the years, and these numbers are the reflection of the same.
When faced with an unforeseen medical emergency, individuals might consider two options to cover related medical costs –
I. Their savings or,
II. A medical emergency loan
When individuals choose to dip into their savings to pay to cope with the medical emergency, it usually leaves them financially vulnerable to more workaday expenses in the future.
Withal, the expenses related to quality treatment in private hospitals for different types of ailments can be high.
Average treatment costs in metro cities –
● Rs. 2.8 lakh – Cardiovascular diseases.
● Rs. 10 lakh – Cancer, including hospitalization and medicines.
● Rs.1.24 lakh – Cataract surgery.
● Rs.2.56 lakh – Gall-stone surgery.
Considering these costs, most individuals prefer the latter funding option, i.e. a personal loan for a medical emergency, to alleviate their financial burden while capacitating themselves to acquire the best quality treatment. And with the advent of technology, loan application, approval, and disbursal process has expedited, thus making it more convenient to address urgent situations promptly.
How to apply for a personal loan for a medical emergency?
An online personal loan is often considered as an immediate and hassle-free option for availing instant funds, enabling you to meet unprecedented expenses with promptness. The process of how to apply personal loan is rather straightforward, especially when you consider an online application.
● Digital loans will witness a 5X growth over the subsequent 5 years as per the Boston Consulting Group.
● The loan market will exceed $1 trillion during this time as well.
Here’s a guide about all you need to know about a personal loan for a medical emergency –
1. Application process
If you have already zeroed in on a lender of your preference to avail a medical emergency loan, follow the procedure mentioned below to apply for a personal loan online –
Step 1. Visit the official website of your chosen lender.
Step 2. Check for the ‘Personal Loan’ option in the ‘Products’ tab and click on it.
Step 3. Click on ‘Apply now’ on the following page.
Step 4. Duly fill out the application form with accurate information after perusing through it.
Step 5. Enter the loan amount you require and the repayment tenor in respective fields
Step 6. Provide the necessary documents with a lender’s representative, who will intimate with you
Subsequently, your documents will be verified and post verification, you will receive approval and then disbursal of the loan amount in your account. In case you are applying for a Personal Loan with financial institutions like Bajaj Finserv, you are eligible for pre-approved offers.
Pre-approved offers fasten the application, approval, and disbursal process significantly and are ideal to meet medical emergencies. Alongside personal loans, these offers also apply to business loans, credit cards, and a host of other financial products. You can check your pre-approved offer by providing your name and phone number.
In that case, the process for how to apply personal loan is as following –
Step 1. Check your pre-approved offer on loan
Step 2. Select the loan amount up to the amount you qualify for and the tenor and apply
In this procedure, there is no necessity of documentation, and thus, approval and disbursal are expedited.
2. Eligibility criteria and documents required
Before you apply for a medical emergency loan, you must ensure that you are eligible to avail it from a specific financial institution. A few standard eligibility criteria for personal loan abided by in leading financial institutions are –
− You must be a citizen of India residing in the country.
− You should be within the age of 23 years to 55 years.
− You must possess a CIBIL score of 750 or higher.
− You should be an employee in an MNC, in the public sector or private sector.
Depending on the lender, there might be additions to this list or modifications. You need to be sure about the eligibility criteria before you apply as a rejection of your application can be a crucial setback during a medical emergency.
Once you are certain about the eligibility criteria, check the documents that you need to produce for a successful application. You should collate the necessary documents beforehand to speed up the application process.
A few necessary documents that most financial institutions ask for are –
− Income proof like the latest salary slips and savings account statements.
− KYC documents.
− Form 60 if PAN is unavailable.
3. Additional factors to consider before applying
The loan amount and repayment tenor
Assess the amount of loan you need beforehand and find the precise tenor that works for you to avoid financial stress later.
● The transaction value of personal loans is estimated to experience a CAGR of 19.3% in the next 3 years (2020 – 23).
● By 2023, such transaction value will reach $2.5 billion from the present value of $1.5 billion.
Personal loan tax benefits
You can also enjoy tax exemptions on personal loan. Nonetheless, you must ensure that you are channeling the funds in avenues that are eligible to earn you tax benefits. As this line of credit does not have any end-use restriction, a personal loan can provide you tax benefits when utilised accordingly.
In conclusion, a medical emergency loan acts as one of the ideal agencies to address medical exigencies promptly. It reduces the strain on your financial standing to ensure the best possible treatment.