Medical Loan - advice please :)

FlowerFairy7

Hi there,

I’m a frequent visitor of MSE, but this is my first time posting on the forum :wave: I’d be really grateful for any advice on medical loans and the best available options.

My treatment total is £4580. I have paid £500 cash deposit, leaving the outstanding balance at £4080.

I have been offered a finance payment plan at 9.9% APR which will allow me to pay for my treatment in instalments over 36 months (£130.69 a month).

My treatment total is £4580 (including deposit) and the total I will pay if I opt for the 9.9% APR payment plan over 36 months is £5204.84.

I have never taken out credit before, no credit cards etc so all of this is very new to me and I want to make sure I am making the right lending choice before I commit to the next three years.

The payment plan is through a medical finance company.

I am with Halifax bank and have looked at lending options with them too. If I took out a loan with Halifax for the same amount, I cannot get a lower APR rate.

I have also asked an advisor at my bank if I would be eligible for a 0% credit card. While I am eligible, I could not take out a credit card for the amount I need.

I wanted to ask those more experienced than me if 9.9% APR over 36 months is a good option, or if there are any alternatives (with a lower APR) that I could explore?

Any advice is greatly appreciated! Many thanks

[Deleted User]

It's not terrible if you have a very thin file. But I would try an eligibility check for a card or loan to check your options.

AnotherJoe

Have you tried other sources for a loan? Sainsbury, M&S, etc?
Could you take out half on CC and half on a loan?


Also, dont discount a higher loan that gives a lower rate.
As a made up example, say you can borrow £5k at 10% but £15k at 5%.
Take out the £15k, then pay back £10k. The penalty of a month or twos interest will likely be less than the overall cost.

FlowerFairy7

Deleted_User wrote: »

It's not terrible if you have a very thin file. But I would try an eligibility check for a card or loan to check your options.

Thank you for taking the time to reply I have done an eligibility check for a card and a loan with my bank, and unfortunately I cannot see a loan option with a lower APR (for the amount I'm looking to lend) or card for the amount I need.

AnotherJoe wrote: »

Have you tried other sources for a loan? Sainsbury, M&S, etc?
Could you take out half on CC and half on a loan?

Also, dont discount a higher loan that gives a lower rate.
As a made up example, say you can borrow £5k at 10% but £15k at 5%.
Take out the £15k, then pay back £10k. The penalty of a month or twos interest will likely be less than the overall cost.

Hi, thank you. I have looked at M&S, which offer loans with as little as 2.8% APR. I have checked using their loan calculator and unfortunately I would not be making a saving if I took out a loan for the amount I need:



Borrowing £4,100 over 36 months:

• Monthly repayment £136.03
• Total amount payable £4,897.08
• Representative 12.6% APR
• Interest rate of 12.6% p.a. (fixed)

Like you advised, if I borrowed more, the APR drops dramatically, but I'd really prefer to only borrow just the amount I need as I would worry about the very large monthy re-payments on a larger loan (e.g. £15k). Thanks for your advice to maybe split the amount between a CC and a loan, I hadn't considered that, but will look into it

Herzlos

Some loans will allow you to reduce the payment amount when you do an overpayment.

badmemory

As Another Joe said you don't have to pay all of a bill by the same method. Especially not if it can save you interest.

dealer_wins

Use the NHS, if they wont do it you dont need it. Or is that old fashioned these days?

FlowerFairy7

Thank you to everyone who has replied, your advice is much appreciated. I have looked on Compare the Market to see what loans are available and the lowest APR I can find for the amount I am looking to borrow is 5.3% with ZOPA:

Representative example: assumed borrowing of £4,100 over 36 months at a fixed rate of 4.5% per annum and fees of £50.00 would result in a representative rate of 5.3% APR (fixed), monthly repayments of £123.26, total amount repayable is £4,437.36.

I have never heard of ZOPA before, does anyone have any experience lending from this company?


They seem to be different from most lenders. Having had a quick look at their website, they say:


"The Zopa model was the first of its kind in the world: we directly match people looking for a low rate loan with investors looking for a higher rate of return."


"Loan customers: We charge an origination fee to help cover the cost of setting up the loan. We also apply a loan servicing fee to each loan contract, which is deducted directly from each borrower repayment before the principal and interest is passed on to investors. Both fees are included in the loan's APR"


Many thanks

Nebulous2

Zopa are a large lender who have taken a fair chunk of the loan business in recent years. You've nothing to worry about with them, other than whether they give you the best rate you can get.

I'm one of their 'investors.' That isn't quite so rosy and carries some risk if a lot of people are unable to repay their loans.

emilyela536

Hey their are many another options you can try but don't take a loan.

Edi81

You are a potential borrower.
You are borrowing money. The lender is who you borrow from.

Sorry, but it really annoys me!

Anyway, considering you have never taken out credit before so have a thin credit file 9.9% is not too bad.