Medical bills tend to be high in Singapore, especially for surgeries and intensive care. There could be situations where the entire bill amount won’t be covered by your Medisave monies or your health insurance. Medisave and most medical insurance policies come with limits on coverage for certain health conditions and elective surgeries. If you have a pre-existing medical condition, your insurer may refuse to cover you for that. A lot of insurance policies require you to settle your medical bills upfront before they reimburse the expenses.
In such cases, personal loans can become extremely helpful. Since most personal loans are unsecured, they offer added convenience. If you don’t have enough cash, a personal loan for medical expenses will be the best option to pay down the bills. Overcharging your credit cards or taking a cash advance with it aren’t recommended since the effective interest rates (EIR) on these are extremely high.
By comparing different personal loan schemes, you may be able to find one that offers a very low rate of interest. Some schemes will also offer you special offers during the promotion period like lower interest, annual fee waiver or processing fee waiver. Some loans also offer limited period cash rebates and cash vouchers with their personal loan products.
You may also use a personal loan repayment calculator available online to calculate your monthly instalments. It helps you appropriate your budget accurately and also gives you a better understanding of your debt liabilities.
Most lenders in Singapore set a minimum eligibility criterion on your annual income. If your annual income is more than or equal to S$30,000, your application will be considered to be valid. Usually, a lender will approve a personal loan that is equal to four times your monthly income. If your monthly income is S$2,500, you may get a personal loan of up to S$10,000.
If your credit score is good, it becomes easier to get a personal loan. A good credit score and a comprehensive credit history of timely payments will assure the lender that you’re a trustworthy customer.
While annual income is an important criterion in deciding your eligibility, there are some personal loan products available in the market where income lower than a certain threshold won’t be a deterrent if you have a good credit score and low risk profile.
Even though most lenders advertise the applied interest rate (AIR), you’ll have to find out the EIR as well, if not mentioned. The EIR includes the processing fee and other costs not considered for calculating the AIR. The EIR also considers the costs of compounding during the entire time horizon.
So, apply for a personal loan that not offers a lower rate of interest but also offers waivers on processing and annual maintenance charges. A combination of these factors will determine your final monthly payment.
Many insurers may decline your request for coverage of an elective process or only pledge to pay a tiny portion of the total cost. Elective surgeries like infertility treatment, hip replacement and cosmetic surgeries may not be necessary to keep you alive but are often important for your emotional wellbeing and stability.
Apart from these, insurers may not cover you for a pre-existing medical condition or they may decide to put a cap on the amount that can be claimed for a particular disease. With a low-interest personal loan, you’ll be able to meet your expenses and pay off the debt in easy monthly instalments. If you continue to make regular payments, you’ll be able to keep the debt from piling up.
While personal loans could give you immediate relief especially after being hit by a medical catastrophe, they can also get you into a loan trap. Hence, shop around for the best deal before choosing one.