Traditionally, Australians have taken out personal loans for particular types of expenditure including the purchase of cars and holidays, payment of education expenses and debt consolidation.  Recently, the personal loan lending associations have noticed a significant increase in the numbers of applicants for loans for medical treatments including cosmetic surgery, breast implants and cosmetic dental work.

Many of these medical procedures are excluded from health insurance, and even if they are covered there are often huge gaps between the cost of the treatment and the amount which insurance companies are prepared to pay. As a result, many consumers are applying to banks and other lenders for finance, and some doctors and dentists work with lenders to offer financial packages for their patients. No longer do consumers need to visit their bank and explain in detail what the loan is intended for; it is now a one-stop process in which you can visit your plastic surgeon, book your treatment and fill out credit application forms at the same time.

Many consumer watchdog organisations have expressed concerns over this development, because doctors are only required by law to disclose their financial interests if this is relevant to patient care, and this requirement is difficult to enforce. As a result, some organisations now require doctors to disclose at the patient’s first visit any financial interests that are relevant to the patient’s care and treatment, and to supply the patient with a written disclosure notice.

Many consumers, on the other hand, are unconcerned by the trend, believing that there is no difference between borrowing money for a new sports car and borrowing money for cosmetic surgery. Whereas in the past lenders have only approved loans for specific purposes such as home improvements, car purchase, holidays, furniture or debt consolidation, they are now responding to the new demands by lifting restrictions on the purposes for which loans can be approved, specifying only that the loan should be for a worthwhile purpose and that the borrower should derive a personal benefit from it.

There are several lenders that now specialise in providing credit for medical and cosmetic treatments. They provide loans from $1,000 to over $40,000 depending on the applicant’s financial circumstances, and their financial products are enabling consumers to choose treatments and procedures that might otherwise be unaffordable. In most cases, these loans carry a fixed interest rate of 13-15% with repayment periods of between one and seven years. This may be a cheaper option in the long run than credit card financing, which typically carries an interest rate of between 18% and 20%.

One advantage of using these specialist lenders is the quick application approval times that they often offer. However, it is usually the case that loans from banks and other traditional lenders have lower rates of interest (link to compare) and fewer additional charges. If a conventional lender agrees to provide finance for your treatment, you may be offered a fixed interest-rate of 9-10%, which will save you a considerable sum of money over the course of the loan.

One advantage of using these specialist lenders is the quick application approval times that they often offer. However, it is usually the case that loans from banks and other traditional lenders have lower rates of interest and fewer additional charges. If a conventional lender agrees to provide finance for your treatment, you may be offered a fixed interest-rate of 9-10%, which will save you a considerable sum of money over the course of the loan.