The total cost of a loan is one of the most important factors to consider when comparing medical loan financing companies.
Taking out a medical loan is an excellent option for patients who can’t pay their medical bills in full. With so many companies in the medical financing industry, though, patients may feel overwhelmed.
The total cost of a loan determines how much borrowers will actually repay on their loan and is vital for choosing the right one for their budget. If your patient is shopping for a medical loan, tell them to keep these two factors in mind.
Is the Interest Rate Fixed or Variable?
A fixed interest rate is one that doesn’t fluctuate over time while a variable interest rate does.
Variable interest rates fluctuate because they are calculated based on a standard interest rate (a benchmark rate or index) that may change over time. This type of loan is a gamble— the standard may decrease, lowering your rates, but it may also increase, upping your rates.
If a patient wants the security of knowing what their payment is and will be over the course of the loan repayment period, tell them to go with a medical loan financing plan with a fixed interest rate.
Is the Repayment Period Long or Short Term?
With a short-term repayment period, borrowers owe higher monthly payments but for a smaller period of time. These loans are affected by interest rates for a shorter time, too, meaning you pay less interest on the loan.
Loan financing plans with long-term repayment periods require smaller monthly payments over a lengthier period of time. Borrowers end up owing more interest on these loans, though, since the interest rate affects the loan for longer.
Long-term medical loans are ideal for patients willing to trade higher interest rates for smaller monthly payments and more time to pay off their debt. Patients who want to pay less interest in exchange for less time to settle up and higher monthly payments should go with a short-term repayment period.
Medical Loan Financing from Epic River
Epic River’s patient lending program is perfect for patients who want to pay the smallest total cost on their medical loan.
Patients won’t have to worry about fluctuating monthly payments since our loans have fixed interest rates. We also offer flexible repayment options so patients can choose the plan that fits their budget.
Next time your patient is looking for medical loan financing, tell them about Epic River’s lending program.