Should You Provide Your Patients With No-Credit-Check Financing?

Healthcare costs are at an ever-increasing high, and people are struggling with their medical bills. It could worry a person if he has to face an unexpected medical cost and he has no insurance, no ready money, or no credit score to arrange for the funds to pay for the same.

Getting medical loans with bad credit is possible, but these can be too tricky. But what if there was a medical loan that could help your patients pay off unforeseen medical expenses – even with a poor credit score?

The Need For No-Credit-Check Financing

No-credit-check loans are given out based on the person’s potential to repay the loan. When they need to pay emergency medical bills and have damaged credit, these loans can be tempting.

No-credit-check financing may seem like the perfect solution to financial problems, but it can pose a much greater risk for the person if they cannot pay the debt back. Moreover, it can harm your practice if patients default on their payments.

Features Of No-Credit-Check Loans

If you’re on a mission to make healthcare affordable for your patients, the thought of providing them with no-credit-check loans may have crossed your mind.

Before you go ahead with that option, you might want to know the features of no-credit-check loans:

  • No-credit-check loans are best for people with a bad credit history or a low CIBIL score since the lender doesn’t check the borrower’s credit score.
  • The lender grants the loan at a higher cost and a relatively higher interest rate than normal loan schemes.
  • Most of the lenders just require proof of income or the person’s repayment capacity to grant the loan.
  • No-credit-check loans for medical bills can be negotiated at better terms, even with questionable credit.
  • Common uses for medical loans financing for dental care, physical therapy, infertility treatments, cosmetic surgery, and weight loss.
  • This loan comes with quick approval, a higher interest rate, flexible tenure, and is available for higher amounts.

Factors That Affect No-Credit-Check Loan Approval

Not all patients are suitable for no-credit-check loans. Healthcare providers should keep the following factors in mind when presenting this option to their patients:

  • Repayment history of the borrower on loans and credit card bills.
  • Job stability of the person of at least a year before they apply for a loan.
  • If the applicant is working in one of the approved and listed companies that bear goodwill and trust, their loan approval chances increase.
  • Young applicants are at a disadvantage when applying for a loan because they are considered less reliable by loan disbursement companies.
  • Prepayment is a positive factor when it comes to availing of a loan.

Benefits Of No-Credit-Check Financing

No-credit-check loans can come in handy for patients in medical emergencies and when there is no other source of paying medical bills. But how do they benefit healthcare providers?

Listed below are some of the advantages of no-credit-check financing for your practice:

  • You won’t turn away patients who do not have a good credit history and can keep your practice running.
  • Your patients won’t have to delay treatments – these loans can even help you save lives.
  • By helping those that cannot afford the upfront cost of the recommended treatment, you earn some goodwill for your practice and earn the loyalty and trust of your patients – all good things that will boost your practice operations.

Disadvantages Of No-Credit-Check Loans For Patients

No-credit-check personal loans for paying medical bills are quite convenient but can be dangerous in a few cases. Listed below are some of the disadvantages of a no-credit-check loan:

  • Unfavorable loan terms, which are usually in favor of the lender, with much higher interest rates and shorter terms, can affect the repaying capacity of the patient.
  • Many no-credit-check loans for bad credit charge APRs of around 30% and can be over 10 times as high. So, these loans can be highly expensive.
  • If the patient cannot pay their loan back on time, it gets rolled up into a new loan, with an additional fee charge and an even higher rate of interest.
  • The payments made are generally not reported to the credit bureaus and won’t help your patients build good credit.
  • Many no-credit-check medical loans can rob your patient of their money right away. The urgency can be commonly targeted by thieves who constantly advertise their products.

Disadvantages Of No-Credit-Check Financing For Medical Professionals

Considering the downsides of no-credit-check loans for patients, there’s no doubt that offering this option puts your practice at risk, too.

  • Patients who cannot pay back or delay their payments could choke your practice’s cash flow and make operations difficult.
  • There’s no guarantee that people will pay back their loans and not take advantage of this financing option. With large amounts of money potentially gone down the drain, you are at risk of harming your business’ financial health.
  • Your staff would need to spend precious time following up on repayments.

Steps To Take Before Applying For A No-Credit-Check Loan

Your patients may be eager to apply for a no-credit-check loan. But as a responsible healthcare provider, you can ask them to take a few steps before they go down that path:

  • Your patient could check and review their itemized medical bill for accuracy. If there are any errors found, the bill can be rectified and reduced.
  • They can set up a payment plan with the authorities that offer interest-free payment plans before applying for a loan.
  • You can offer them a discount if they are willing to make a reduced lump-sum payment.
  • You can check with third-party healthcare financing solutions to allow your patients to fulfill their medical costs – and it reduces your chances of risk, too.

The Bottom Line

No-credit-check loans are highly feasible for patients looking for flexible financing, which comes with easy approvals and customizable and affordable monthly payment options.

Medical emergencies are understandable, and in case of dire needs, many opt for no-credit-check personal loans, which can be quite unreasonable for many in the long run.

But one must consider the repercussions wisely before offering such a financing option. Not only can it hurt patients with debt accumulation and monetary pressure, but it can put your practice in harm’s way, too.

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