How to Use a Loan Against Property for Medical Emergencies

Medical emergencies can arise unexpectedly and significantly affect your finances. Studies show that healthcare costs in India have been increasing by 14% annually due to inflation, with only 62% of hospital expenses being paid out of pocket. With skyrocketing medical costs, how do you manage treatments without breaking the bank?

This is where loans against property (LAPs) come in. Taking a loan against property for medical expenses can help you fund advanced surgeries or treatments comfortably. They come with several benefits and provide a secure and hassle-free way to access funds when needed. This article delves into loans against property in detail, how you can use them for medical expenses, and their benefits.

What are Loans Against Property (LAPs)?

Loans against property, also known as home equity, are secured loans where the borrower pledges a property they own as collateral. It has zero restrictions, meaning you can use it for various purposes, including education, business expansion, medical expenses, etc. It allows you to borrow a high amount to cover medical costs and repay it comfortably through manageable monthly installments.

How do you use Loan Against Property for Medical Expenses?

Medical emergencies often take us by surprise, and while some costs are covered by insurance, it isn’t always enough. Loans against property can lend you up to Rs. 10 crore, allowing you to pay for the following medical treatments with ease:

1. Diagnostic tests

Depending on the severity of the condition, you may require hi-tech diagnostic exams and procedures. These can be extremely expensive, with just one MRI scan reaching Rs. 20,000. Additional tests can further add to these expenses, making it crucial to have adequate financial support. LAPs are an easy way to cover the price of CT scans, MRIs, blood panels, and other diagnostic tests so you can focus on recovery.

2. Hospitalisation costs

Hospitalisation comes with numerous other expenses, such as room upgrades, dietician costs, physician consultations, special meals, and other appointments. While treatments can be covered with insurance, extra expenses are not always included. Depending on the institution, a hospital stay can cost up to Rs. 30,000 per day. LAPs can be valuable for funding necessary hospital stays and associated costs.

3. Optional treatments

Several non-emergent medical treatments have gained popularity in recent years. These include dental implants, IVF and other fertility treatments, weight loss programs, LASIK surgery for eyesight, acupuncture and naturopathy, and more. These treatments are beneficial for overall wellness, fertility, and other reasons, but they can be costly. LAPs can help you cover these treatments comfortably.

4. Physiotherapy and other post-operative care

Many surgeries and medical treatments require special post-treatment care. Physiotherapy is one of the most common post-operative therapies, requiring specialised equipment and skilled professionals. It helps patients regain mobility, flexibility, and strength in the affected areas, prevent blood clots and other complications, and recover quicker. However, it can be costly due to the equipment, length and frequency of treatment, and skilled professionals. LAPs can be used to fund post-operative care and ensure a full recovery.

5. Regular monetary expenses

Expensive hospital visits can strain your finances. This can take a toll on other regular expenses, like rent, groceries, education bills, etc. LAPs can help ensure these expenses are handled without compromising healthcare costs.

Why are LAPs Beneficial for Medical Expenses?

LAPs offer several benefits to cover medical expenses. These include:

1. High loan amounts

The amount of a loan against property depends on the value of your property. Lenders typically extend up to 80% of the property’s value, and loan amounts can range from Rs. 5 lakhs up to Rs. 10 crores. This makes dealing with exceptionally costly medical expenses like long-term hospital stays, advanced treatments, surgeries, and critical care easier.

2. Affordable interest rates

LAPs are secured loans, which means lenders are willing to offer better interest rates than credit cards and personal loans. Depending on the financial institution and borrower’s profile, LAP loan interest rates range between 9% and 13%.

3. Longer and flexible repayment tenures

Loans against property usually come with longer repayment tenures. Depending on the financial institution, this can extend up to 20 years. Borrowers also have the flexibility to repay the amount in smaller amounts, which reduces financial strain.

4. Quick access

During medical emergencies, time is of the essence. LAPs can be processed and approved quickly, and the loan amount is disbursed immediately. This ensures that your requirements are met promptly without unnecessary delays.

5. Zero restrictions

Loans against property can be used for various medical expenses, including surgeries, hospitalisation, diagnostic tests, etc.

What Documents are Required to Apply for a Loan Against Property?

The documents required to apply for an LAP depend on the lender’s policies and the borrower’s profile. The most commonly required documents include: 

• A photograph
• Photo identity proof (such as copies of your voter ID, passport, driving license, or Aadhaar card)
• Address proof (such as a copy of your ration card, passport, or electricity bill)
• Signature verification
• Income proof (such as income tax returns, balance sheets, profit and loss statements, and a copy of bank statements from the last 12 months)

Salaried employees may also be required to submit Form 16 from the last two years and a copy of their salary slips from the previous three months.

Wrapping up

Loans against property are valuable resources for medical expenses. They can be used for various reasons, including financing surgeries and treatments, post-operative care, medications, household expenses, and other treatments and therapies.

If you are seeking a loan against property for medical treatment, consider Tata Capital. Enjoy a simple documentation process, quick processing and disbursal, flexible terms, and affordable interest rates. To learn more about our LAP offerings, contact us via the Tata Capital website or download the mobile app today!