Medical Equipment Loan

Emerging technologies in the medical field open up new ways for doctors and practitioners to treat diseases in more effective ways. Hence, it becomes necessary for doctors to equip themselves with the latest state-of-the-art medical apparatus.   

However, upgrading your hospital or clinic with new medical equipment may cost you a significant financial outlay. For instance, a single unit of X-ray machines, MRI machines, life-support ventilators, and CAT scan machines can cost a fortune.

In this case, a medical equipment loan is a viable solution to upgrade your healthcare facility with the latest apparatus. As its name suggests, medical equipment financing allows you to access funds to purchase medical apparatus. You can pay back the loan amount and interest in easy EMIs from future cash inflows in the course of the repayment tenure. 

Read on to learn about healthcare equipment finance and how to avail of this lending facility. 

You need to have high-grade medical equipment to provide best-in-class medical services to your patients. As mentioned, the upgradation of medical equipment requires a considerable capital outlay, which you can finance with a medical equipment loan.

The following are some notable features of a loan for medical equipment you need to know before applying for it:

• You can use the medical equipment loan amount only to purchase the latest state-of-the-art medical devices

• Some banks and NBFCs offer customised medical devices loans to help you purchase the kind of equipment you need

• Lending institutions provide flexible repayment tenures, ranging from 1 year to 7 years

• Due to the involvement of huge investments, financial institutions generally offer these loans at lower interest rates

• These loans are generally secured by the medical equipment you purchase

The following are some documents you need to submit when applying for a loan for medical equipment:  

1. For Self-employed Doctors-

• Proof of Identity: Aadhaar card, Voter ID, Passport, or PAN card

• Proof of Residence: Aadhaar card, Voter ID, Passport, Utility bills, or Rent agreement

• Proof of Business Address: Utility bills or rent agreement

• Proof of Income: ITR for the last 2 years or bank statement of the previous 6 months

2. For a Firm or Company:

• Proof of Business Address: PAN card, Business address proof, and other registration documents

• Proof of Identity of Director, Proprietor, or Partner: Aadhaar card, Voter ID, Passport, or PAN card

As a health equipment loan program is secured against the medical devices you purchase, banks charge lower interest rates on these loans. The interest on this loan may vary depending on the lender, but it usually starts from 8.5% per annum. 

With the loan amount, you can purchase different loan equipment and repay the principal and interest across the repayment tenure. Furthermore, banks and NBFCs charge other types of fees as well when you avail a medical equipment loan.

For instance, you need to pay a processing fee of up to 2% (plus taxes) of the loan amount at the time of its disbursal. 

On the other hand, if you decide to prepay or foreclose the loan, the bank may charge you 4% (plus taxes) on the remaining amount. However, remember that these charges vary from one lender to another. 

The cost of a single medical device unit can go up to lakhs or even a crore. Hence, a medical equipment loan amount can be a huge sum. When you borrow such a large amount as a loan, you need to have financial clarity about the repayment schedule.   

In this case, a medical equipment Loan EMI calculator comes in handy. You can use it not only to compare different lenders but also to draw an amortisation schedule. This schedule helps you determine the monthly outflow of EMIs to repay your loan.

By chalking out a clear budget for your loan repayment, you can save yourself from loan default and keep your credit history spotless.