Can You Get a Loan to Pay for a Surgery? Here’s How It Works in Australia

Getting surgery done privately isn’t just about choosing a better hospital or shorter wait times. It’s often about paying for surgery when public healthcare can’t cover it-or won’t cover it fast enough. But what if you don’t have $10,000 sitting in the bank for a knee replacement, or $5,000 for a cosmetic procedure? Can you get a loan to pay for a surgery? The answer is yes-but it’s not as simple as applying for a credit card. There are rules, risks, and real options most people don’t know about.

Why People Need Loans for Surgery

In Australia, Medicare covers a lot, but not everything. If you want a private room, a specific surgeon, or a procedure that’s deemed "elective"-like a tummy tuck, breast reduction for back pain, or even some types of cataract surgery-you’re often on your own for the bill. Private hospitals charge anywhere from $3,000 to $25,000 depending on the surgery. Even with private health insurance, you might still owe thousands in out-of-pocket costs like specialist fees, anaesthetist charges, or hospital excesses.

That’s where medical loans come in. People aren’t just getting loans for cosmetic reasons. A 58-year-old woman in Melbourne needed spinal fusion surgery after years of chronic pain. Medicare covered part, but she still had $8,200 left. She didn’t want to drain her savings or delay the surgery. So she took out a medical loan with a 9.5% interest rate, paid it off in 24 months, and got back to gardening by summer.

Types of Loans for Surgery

Not all loans are made the same. Here are the three most common ways Australians finance surgery:

• Personal loans - These are unsecured loans from banks, credit unions, or online lenders. You can get anywhere from $5,000 to $50,000. Interest rates range from 7% to 20%, depending on your credit score. Repayment terms are usually 1 to 7 years. Many lenders let you use the funds for medical expenses without asking questions.
• Medical financing plans - Offered directly by clinics or hospitals, these are often interest-free for 6 to 24 months if you pay off the balance on time. Think of them like a "buy now, pay later" deal for surgery. But if you miss a payment or don’t pay it off in full by the deadline, you could be hit with retroactive interest-sometimes as high as 25%.
• Home equity loans or lines of credit - If you own a home, you can borrow against its value. Rates are lower (around 5% to 8%), but you’re putting your house on the line. This option works best for major surgeries with high costs, like joint replacements or cancer treatment.

One thing to watch: some clinics push their own financing plans hard because they earn a commission. Don’t assume their offer is the cheapest. Always compare it to what a bank or credit union offers.

What You Need to Qualify

Lenders don’t care that you’re getting surgery. They care about your ability to repay. Here’s what they look for:

• Credit score - Most lenders want at least a 600 score for approval. A score above 700 gets you better rates. If your score is below 550, you might need a co-signer or a secured loan.
• Income stability - You’ll need to show proof of income: payslips, tax returns, or Centrelink statements. Self-employed people need at least 12 months of financial records.
• Debt-to-income ratio - Lenders don’t want you drowning in other debts. If your monthly debt payments (car loan, credit cards, etc.) are more than 40% of your income, approval gets harder.
• Loan purpose - Some lenders ask for a letter from your doctor confirming the surgery is medically necessary. This can help you get lower rates, especially for non-cosmetic procedures.

For example, a 42-year-old teacher in Brisbane needed a hip replacement. She had a 720 credit score, stable income, and a letter from her orthopaedic surgeon. She got a $12,000 personal loan at 8.9% over 5 years. Her monthly payment? $250. She could afford it. Her neighbour, who had no credit history and worked cash-in-hand, was turned down by three lenders before finding a friend willing to co-sign.

Medical Financing Plans: The Interest Trap

Clinics love to advertise "0% interest for 12 months" on surgery. It sounds perfect-until you read the fine print. Most of these plans are deferred interest loans. That means if you don’t pay the full balance by month 12, they charge you all the interest that would’ve accumulated from day one.

Let’s say you borrow $6,000 for a breast reduction. The clinic says "0% for 18 months." You pay $300 a month for 17 months-$5,100 total. You’re $900 short. On month 18, they slap you with $1,200 in retroactive interest. Now you owe $7,200 instead of $6,000. That’s a 20% price hike just for missing the deadline.

These plans are only safe if you’re 100% sure you can pay it off on time. If there’s any doubt, skip them. Go for a personal loan with a fixed rate instead.

How to Compare Loan Offers

Don’t just pick the first offer you get. Here’s how to compare properly:

1. Look at the APR - That’s the total cost of the loan including interest and fees. It’s the only number that lets you compare apples to apples.
2. Check for hidden fees - Application fees, origination fees, early repayment penalties. Some lenders charge $200 just to process your application.
3. Read the repayment schedule - Will your monthly payment fit your budget? Use a free online calculator to test different terms.
4. Ask about flexibility - Can you pause payments if you lose your job? Can you pay extra without penalty?

One Sydney man needed a double hernia repair. He got three quotes:

• Clinc financing: 0% for 12 months, $5,800 total, $483/month - but $1,100 in retroactive interest if unpaid
• Bank personal loan: 9.9% APR, $5,800, $125/month for 5 years - no penalties, fixed rate
• Credit union loan: 7.8% APR, $5,800, $115/month for 6 years - lower payment, but longer term

He chose the credit union. He’d rather pay a little more in total interest than risk the clinic’s trap.

What If You Can’t Get a Loan?

Not everyone qualifies. If you’re turned down, here are other options:

• Payment plans directly with the hospital - Many private hospitals offer in-house plans with no interest if you pay within 12 months. Ask for one.
• Charity or nonprofit aid - Organisations like the Royal Flying Doctor Service or local community health funds sometimes help with urgent surgeries for low-income patients.
• Use your superannuation - Under extreme hardship (like cancer treatment), you may be able to access your super early. You’ll need approval from the ATO and proof from your doctor.
• Wait for public healthcare - If it’s not an emergency, you might get on the public waiting list. Wait times vary-hip replacements can take 6 to 12 months in NSW, but only 3 to 5 in Tasmania.

Red Flags to Avoid

Some lenders prey on people in pain. Watch out for:

• "No credit check" loans - These usually come with sky-high interest (30%+), hidden fees, and short terms that trap you in debt.
• Claims like "Guaranteed approval" - If it sounds too good to be true, it is.
• Pressure to sign quickly - Legitimate lenders give you time to think. If they’re rushing you, walk away.
• Loans tied to a specific clinic - You might be locked into using their surgeon or facility, even if it’s not the best option.

One woman in Adelaide was told she "needed" a $15,000 loan from the clinic’s partner lender to get her rhinoplasty. She later found out she could’ve gotten the same surgery for $8,500 at another clinic-and qualified for a bank loan at 8.5%. She lost $6,500 because she trusted the sales pitch.

Final Tips Before You Borrow

- Get a second opinion - Sometimes surgery isn’t the only option. A physiotherapist, pain specialist, or even a different surgeon might offer alternatives.

Check your insurance again - Did you miss a cover? Some policies include extras like dental or optical, but not surgery. Call your insurer and ask what’s covered.

Plan for the unexpected - Recovery can mean lost wages. Make sure your loan payment won’t leave you unable to afford groceries or transport to appointments.

Don’t use credit cards - Credit card interest is often higher than personal loans, and you can’t negotiate repayment terms.

Financing surgery isn’t a failure. It’s a smart financial move-if you do it right. Thousands of Australians take out medical loans every year. The key isn’t avoiding debt. It’s choosing the right kind of debt.