Medical Loans - Rates from 5.67%

Dental work is the most common medical loan purpose. From crowns and bridges ($1,500 to $5,000 per tooth) to full mouth reconstruction ($15,000 to $50,000) and orthodontics ($6,000 to $10,000), dental costs add up quickly because Medicare doesn't cover most dental procedures.

Cosmetic surgery loans cover rhinoplasty ($8,000 to $18,000), breast augmentation ($8,000 to $15,000), abdominoplasty ($10,000 to $18,000) and facelifts ($15,000 to $30,000). These are almost never covered by private health insurance, making a loan the primary funding option.

Laser eye surgery costs $4,000 to $8,000 for both eyes depending on the technique (LASIK, PRK or SMILE). Some health funds cover a portion, reducing the loan amount needed.

IVF treatment ranges from $10,000 to $30,000 over multiple cycles. Medicare covers part of each cycle (typically $3,000 to $5,000 back), but the out-of-pocket gap accumulates over 2-4 cycles. Bariatric surgery costs $15,000 to $25,000 for lap band or sleeve gastrectomy, with limited private health cover.

Medical loan rates start from 5.67% for borrowers with strong credit (Equifax score above 700, stable income, minimal existing debt). Most applicants receive rates between 7.99% and 14.99% depending on their profile.

Terms range from 1 to 7 years. Shorter terms mean higher monthly repayments but less total interest. On a $15,000 medical loan at 9.99%: a 3-year term costs $484/month with $2,408 total interest. A 5-year term drops to $318/month but total interest rises to $4,104. A 7-year term is $249/month with $5,914 total interest.

Common fees include: establishment fees ($0 to $500), monthly account fees ($0 to $15) and early repayment fees (some lenders, typically 1-2% of the remaining balance). Several lenders on our panel charge zero fees on medical loans, making the comparison rate equal to the advertised rate.

If your clinic offers a deferred start (no repayments for 3-6 months), check whether interest still accrues during that period. Most deferred-start plans charge interest from day one, meaning you pay interest on the full amount without reducing the principal. On a $20,000 loan at 12.99%, 6 months of deferred repayments adds $1,299 in interest before you make a single payment.

Most clinics offer in-house finance through a single provider (commonly Medfin, TLC or Latitude). These are convenient because the clinic handles the paperwork, but you're limited to one lender's rate. That rate may not be the cheapest available for your credit profile.

Clinic finance often comes with promotional offers: 0% interest for 6-12 months, or deferred payments while you recover. Read the fine print. Most 0% offers revert to 19.99% to 25.99% on the remaining balance if not paid in full by the promotional period end. On a $12,000 procedure with a 12-month 0% promotion, the reversion rate on a $4,000 remaining balance costs $1,039 in the second year alone.

A personal loan through Emu Money at 8.99% on the same $12,000 over 2 years costs $1,145 in total interest with no reversion risk. You know the total cost upfront.

Buy-now-pay-later services (Afterpay, Zip) are available at some clinics for smaller procedures under $2,000 to $5,000. These split the cost into 4-8 fortnightly payments with no interest if paid on time, but late fees accumulate quickly and missed payments affect your credit score.

Start with the total cost of the procedure, not just the surgeon's fee. An itemised quote should include: surgeon or dentist fee, anaesthetist fee, hospital or day surgery fee, implants or prosthetics, post-operative garments or medications, and any follow-up consultations.

Borrow exactly what you need after deducting any Medicare rebate, private health fund cover, or savings you plan to contribute. Over-borrowing costs you interest on money sitting in your account. Under-borrowing means scrambling for the gap mid-treatment.

For procedures under $5,000 (single dental crowns, minor cosmetic treatments), a 1-2 year term keeps total interest under $400 at typical rates. For $10,000 to $30,000 procedures (surgery, IVF, full dental work), a 3-5 year term balances affordability with total cost. Avoid stretching beyond 5 years for medical loans because you'll be paying for a procedure long after you've recovered from it.

If your procedure is time-sensitive (dental pain, medically recommended surgery), apply first and compare rates. If it's elective with flexible timing, spend 3 months improving your credit score before applying. Each 50-point improvement in your Equifax score can reduce your rate by 1-3%.

Medical loans are personal loans assessed under standard consumer lending criteria. You need to be 18+, an Australian citizen or permanent resident, and earning regular income (employed, self-employed or receiving Centrelink payments for some lenders).

Your credit score has the biggest impact on your rate. Above 700 qualifies for rates from 5.67%. Between 500 and 700 narrows the panel but still has competitive options from 8.99%. Below 500 limits you to specialist lenders at 14.99% and above.

Income requirements vary by lender and loan amount. Most lenders require a minimum of $25,000 to $30,000 per year in net income. For loans above $30,000, lenders look for income of at least 3-4 times the annual repayment amount.

Centrelink recipients can access medical loans through specialist lenders, though options are more limited. Disability Support Pension and Carer Payment recipients are more likely to be approved than those on JobSeeker, because the income is ongoing.

Medicare covers the Medicare Benefits Schedule (MBS) fee for medically necessary procedures performed by a specialist. But the MBS fee is often well below the surgeon's actual charge. The difference is the gap fee, which is what most people finance.

For example, a knee arthroscopy with an MBS fee of $700 may have a total surgeon charge of $3,500. Medicare pays 75% of the MBS fee ($525), leaving you with $2,975 in gap fees plus hospital, anaesthetist and other costs.

Private health insurance can cover hospital accommodation and part of the surgeon's gap if your fund has a gap cover scheme. But it won't cover the full out-of-pocket cost. On a $15,000 procedure, private health may cover $5,000 to $8,000, leaving $7,000 to $10,000 to finance.

For elective or cosmetic procedures, Medicare and private health generally pay nothing. The full cost is yours. Check your health fund's extras cover for dental, optical and some therapies. A $1,200 annual extras limit on dental doesn't go far against a $25,000 reconstruction, but it does reduce the loan amount slightly.

Always claim your Medicare rebate and health fund benefits before finalising your loan amount. Borrow the gap, not the gross.

Australia does not offer a general tax deduction for personal medical expenses. The medical expenses tax offset was abolished in 2019. You cannot claim your medical loan repayments, interest or procedure costs as a tax deduction on your individual return.

The exception is if the medical expense relates to your income-producing activity. A professional singer who needs dental implants to perform, or a model who needs cosmetic work for their career, may have a case for a deduction. These claims are scrutinised heavily by the ATO and require clear evidence linking the expense to income.

Self-employed health professionals can claim their own professional development and some health costs as business expenses, but personal medical procedures for the business owner are generally not deductible.

The practical tax benefit is indirect: if private health insurance covers part of your procedure, your health insurance premiums attract the Private Health Insurance Rebate (up to 33.89% depending on age and income). This reduces your insurance cost, which in turn reduces the amount you need to borrow.