How To Buy Now And Pay Later For Health Care

Loans that allow you to buy now and pay later Divide health-care bills into smaller payments. Consider the terms and financing options first.

"Buy now, pay later" has become popular in retail and travel purchases, and companies such as Walnut now offer BNPL for health care costs. Patients can use this payment option to divide their medical bills into small monthly payments that may include interest.

BNPL loans for health care can help with one-time payments for large medical bills, but borrowers must make sure the monthly payments are manageable. Traditional payment plans with providers or saving for pre-planned medical procedures should be considered first.

How Does BNPL Work In Health Care?

For those seeking elective or cosmetic surgeries, procedures without insurance coverage or high deductibles, or those who do not qualify for financing from a bank or online lender, buy now, pay later may be an option.

A few companies are beginning to offer to buy now, pay later health care programs. Depending on the lender, the process may begin as a payment option at the doctor's office or as a service where you provide your procedure bill. Walnut, for example, works directly with patients, who send a medical bill or the specifics of a planned procedure to a Walnut agent.

Companies determine eligibility through pre-qualification, which usually entails a soft credit pull that does not harm your credit score. Some lenders will also look at the big picture. Walnut, for example, takes into account current economic conditions as well as your payment history if you are a current Walnut customer.

Loan amounts and terms vary by BNPL provider and may be considered on an individual basis. Walnut offers terms of three, six, twelve, or forty-eight months. Patients can apply, manage, and pay their bills online or via a mobile app.

Interest rates and fees vary as well, depending on a borrower's creditworthiness and the treatment. Some qualified borrowers may be eligible for interest-free loans. If you are charged interest, the rate may be "between a high single-digit and low teens," according to Walnut.

As with any financing option, it's critical to compare costs, terms, and other features between lenders.

Should You Consider BNPL To Cover Your Health-Care Costs?

A BNPL loan, depending on the interest rate, can be an expensive option for covering medical expenses. Consider the following scenarios to see if it makes sense for you.

Consider BNPL for health care if you have:

•You can get a loan with no interest. Borrowers who meet certain criteria may be eligible for a no-interest loan.

•The monthly payments are within your means. Determine whether your budget can comfortably handle the payments for the entire term before committing to a loan, no matter how small.

Consider BNPL Only If:

•Your medical provider has its own payment plan. Your doctor's office may already have low- or no-interest payment plans in place. This is an ideal situation because it allows you to negotiate terms directly with your provider rather than going through a third party.

•The interest rate is extremely high. Some lenders charge interest rates as high as 30%. A $3,000 loan with a 30% interest rate and a 12-month term would result in a total interest cost of $510.

•You have a lot of debt. Are you currently repaying other loans or carrying large credit card balances? If this is the case, exercise caution when taking on new debt. A large amount of debt can lead to missed payments and financial stress.

•You are eligible for assistance. Some healthcare providers, depending on the procedure, provide financial assistance to uninsured and underinsured individuals. Consult your doctor to see if you are eligible for any hardship programs.

Alternative Methods Of Paying For Health-Care Expenses

There may be better ways to manage the cost of a medical bill than a BNPL loan.

Payment Plan With The Provider In The Traditional Sense- If you have a large medical bill, ask your doctor if you can work out a payment plan. This enables you to create and commit to a personalized plan that divides the bill into manageable monthly installments, often at no additional cost.

A family Loan -A loan from a family member may have a lower interest rate and better terms. Make a contract outlining the terms and conditions, and consider the impact this arrangement may have on the relationship.

Assistance With Finances -If you are experiencing financial difficulties, you may be eligible for financial assistance from a charitable organization or a government program. Check to see if you are eligible for assistance before taking out a loan.

CareCredit- CareCredit is a specialty credit card that is accepted by over 250,000 providers. Depending on the provider location, you may be eligible for 0% interest short-term financing if the balance is paid off by the end of the term (six, 12, 18, or 24 months). To see if you qualify, contact a participating provider.

Loan For Personal Use-Personal loans are available from a bank, credit union, or online lender and are repayable in monthly installments. APRs typically range from 6% to 36%, with terms ranging from two to seven years.

Online lenders offer pre-qualification with a soft credit check, whereas credit unions typically offer lower rates and more flexible terms. Still, a personal loan is likely the most expensive option for covering medical expenses, so look into other options first.

Commonly Asked Questions

What Exactly Is Buy Now, Pay Later?

BNPL allows customers to pay for purchases in small monthly installments, sometimes with no interest.

Does Buy Now And Paying Later Hurt My Credit Score?

Many BNPL options allow you to pre-qualify with a soft credit pull that does not affect your score; however, missing even one monthly payment may cause your score to drop.

Is It True That Every Health Care Provider Offers Buy Now, Pay Later?

Some providers provide BNPL options, while others may collaborate with you to create a personalized payment plan. Inquire with your provider if either option is available.

What Are The Advantages And Disadvantages Of Using Buy Now, Pay Later Apps?

While BNPL loans may provide payment flexibility and low-interest rates, they can lead to impulsive spending on items you cannot afford. Before agreeing to any loan, always consider your monthly budget.