Managing Personal Loans During Medical Emergencies
Imagine facing a sudden medical crisis. You’re already dealing with the emotional and physical strain when financial worries start creeping in, adding to the stress. You take out a personal loan to cover urgent expenses—doctor visits, prescriptions, perhaps even surgery. The money is a much-needed lifeline, but as the bills and needs continue to grow, you might wonder: how can you make sure that this loan truly helps, without adding more financial strain down the road? Let’s see the steps to manage the instalments of the loan and meet the current obligations.
Assess the amount you need for meeting the expenses
In the initial stages of a medical emergency, it’s crucial to estimate your total financial requirements accurately. This includes:
• Medical treatments and procedures: Consult with your healthcare providers for a breakdown of immediate and upcoming procedures. Common expenses include surgery costs, ICU charges, consultation fees and diagnostic tests.
• Medications and equipment: Many treatments require specific medications, ongoing prescriptions or medical equipment like oxygen cylinders, which can add up quickly.
• Post-treatment care and rehabilitation: Factor in physiotherapy, follow-up consultations and any supportive care that might be necessary.
• Unforeseen complications: It’s essential to anticipate some additional costs for unexpected issues.
Prioritise urgent medical expenses
Allocate the loan primarily to immediate, life-saving or essential medical procedures. This ensures funds are available for critical interventions and reduces financial strain by addressing the most urgent needs first. Break expenses down into two categories:
• Immediate/emergency expenses: This includes emergency surgeries, ICU fees or life-saving drugs, which need instant allocation.
• Non-urgent costs: Expenses that can wait a bit longer, such as elective surgeries or non-essential treatments.
Set aside an emergency fund from the loan (If Possible)
If your loan amount allows, try setting aside a portion for a contingency fund. This emergency reserve can:
• Cover unexpected expenses: Medical treatments sometimes require additional medications, sudden shifts to higher levels of care or follow-up tests that weren’t initially planned.
• Reduce the need for future loans: By having a buffer, you avoid re-borrowing and accumulating further interest, easing the repayment burden in the long run.
Create a repayment plan
Repayment is a key component of managing loans responsibly. To build a repayment plan:
• Calculate EMI (Equated Monthly Instalment): Use online EMI calculators to determine monthly payments based on your loan amount, interest rate and tenure.
• Align with income and expenses: Ensure the EMI is affordable within your income, accounting for other regular expenses.
• Opt for longer tenures, if necessary: In emergencies, longer tenures can lower EMIs, easing immediate cash flow pressures, though it may slightly increase total interest.
• Negotiate with the lender: Some banks and financial institutions offer flexible repayment options for emergency loans, like EMI moratoriums or waivers on prepayment penalties.
Explore insurance reimbursements and other support
Maximise all available financial assistance sources to reduce the out-of-pocket expenses associated with medical care. Here’s how:
• Health insurance claims: Review your policy’s coverage details, including hospitalisation limits, surgery and drug reimbursements. Some policies also cover post-hospitalisation expenses. Initiate claims promptly and keep all documentation, like bills and diagnostic reports, for a smooth claim process.
• Government schemes in India: Programs such as Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY) and Central Government Health Scheme (CGHS) cover specific medical expenses for certain income groups.
• Employer medical support: Some companies offer emergency funds, loans or reimbursements for employees facing medical crises. Speak with your HR department to understand the options available.
• NGO and charitable support: Certain NGOs offer financial support for costly medical treatments. Research organisations like Cancer Aid and Research Foundation or Kidney Foundation that assist with treatment costs.
Review and adjust regularly
Your financial situation may change over time, especially in medical emergencies where treatments can be prolonged. It’s important to:
• Monitor repayment and budget: Track your loan balance and EMI payments to ensure timely repayments and avoid penalties.
• Adjust for changing needs: As the medical situation progresses, there may be additional treatments, changes in income or insurance claim updates. Revisit your budget and repayment plan periodically to adapt to these changes.
• Seek assistance if needed: If repayment becomes challenging, consult with your lender to explore restructuring options, which may include lowering EMI or extending tenure.
Conclusion
In times of medical emergency, remember that health is always the top priority. Managing finances is crucial, but it should never come at the expense of essential care and well-being. Loans and financial arrangements are tools to help support recovery and peace of mind. With careful planning, budgeting, and use of available resources, you can focus on health while staying financially resilient. Your wellness and that of your loved ones come first, and every step you take towards financial stability during this time is an investment in a healthier, more secure future.
