Interest-Free Medical Procedure Loans for Bad Credit

Do you know that you can use a plain vanilla employee benefits program to generate an interest-free loan to pay for upcoming medical procedures – even if you have a bad credit history?

You can get this government-supported financing mechanism without a credit check and a FICO® score below 500!

Do you know that the same medical financing program can lower specific surgery costs by 39% to 90% in two different ways?

It probably sounds too good to be true – but it is.

Learn how a Healthcare Flexible Spending Account (FSA) delivers on these fantastic promises, and take advantage.

Medical Loans for Surgery

You can utilize your healthcare FSA (if offered by your employer) to create an interest-free medical loan for elective surgery – even if you have bad credit.

Furthermore, you may get extra help paying for the procedure via health insurance because both require pre-certification.


You can use your healthcare FSA for a medical loan for surgery for many elective procedures – but not all. Employers must immediately reimburse all qualifying expenses.

In other words, not every surgical procedure is eligible. Therefore, you must obtain a pre-certification letter from your plan administrator before the annual open enrollment.

The pre-certification will require that you show that the procedure is medically necessary: diagnose or treat an illness or injury. Taking this step has two critical benefits.

  • Paying for surgery without health insurance is unnecessary when you can establish a medically necessary reason because you can enroll in a plan that covers pre-existing conditions with no waiting period
  • The FSA use-it-or-lose-it rule means that you forfeit any unspent funds at the end of the year, which could happen if the administrator denies your claim

Cosmetic Surgery

You cannot use your FSA as a medical loan for cosmetic surgery. Cosmetic procedures reshape healthy tissue to enhance appearance and symmetry and do not qualify for reimbursement because they are not medically necessary.

For instance, no credit check cosmetic surgery financing would not be available via your FSA because the plan administrator would reject your claim. To make matters worse, you might lose the money you chose to contribute during open enrollment if you have no other valid expenses during the year. 

Plastic Surgery

Most people can get an FSA medical loan for plastic surgery because these expenses often qualify. Plastic procedures reconstruct facial and body defects caused by congenital deformities, accidents, or illnesses.

Plastic surgery is typically medically necessary, meaning your FSA and health insurance should cover the procedure. Therefore, compile complete documentation in advance to pre-certify with both administrators.

Free plastic surgery is viable when health insurance pays. Therefore, investment in pre-certification means you might have to borrow less money – just enough to cover the deductible.

Bariatric Surgery

Likewise, many people can get an FSA medical loan for bariatric surgery because these expenses often qualify. Weight loss procedures are medically necessary when the patient meets specific parameters.

You can get gastric bypass surgery for free when your private health insurance, Medicaid, or Medicare pays for the procedure. Once again, obtain pre-certification before open enrollment for both administrators to establish the appropriate rationale.

  • Prior participation in clinical weight loss program
  • Body Mass Index (BMI) above 40
  • BMI above 35 with obesity-related health problems
    • Diabetes
    • High blood pressure
    • Sleep apnea
    • Elevated cholesterol

Eye Surgery

Patients can obtain an FSA medical loan for elective eye surgery because vision expenses typically qualify for reimbursement. However, some procedures are not medically necessary, meaning the pre-certification process may help in only one area instead of two.

Consider these contrasting examples.

  1. Laser eye surgery (LASIK) financing with no credit check is viable via your FSA. Still, your health insurance will never chip in because correcting refractive errors is rarely medically necessary and falls under the vision umbrella.
  2. Medicaid and Medicare cover cataract eye surgery when medically necessary; the cloudy lens obscures vision beyond specific measurement.

Dental Surgery

Likewise, patients can obtain an FSA medical loan for oral surgery because dental care expenses typically qualify for reimbursement. Once again, some procedures are not medically necessary, meaning the pre-certification process may help in only one area instead of two.

Consider these contrasting examples.

  1. Dental implant financing for bad credit is viable through your FSA, even though most health and dental insurance plans do not cover bone grafting and implant surgeries.
  2. Health insurance covers oral surgery when medically necessary, such as the extraction of bone-impacted wisdom teeth and correcting congenital jaw issues.

Bad Credit Medical Loans

If offered by an employer, an FSA-enabled interest-free medical procedure loan is available to every employee – even those with bad credit and scores below 500 – without pulling your consumer report.

No Credit Check     

People with adverse history appearing on their consumer reports can get an FSA medical loan without a credit check. IRS rules stipulate that employers offering an FSA must allow all employees to participate.

In other words, employers cannot pull a copy of your credit report or review your score. They must accept all takers and cannot deny your contribution request.

However, do not confuse the “no credit check” requirement for guaranteed loan approval via an FSA. You must undergo a qualifying medical procedure for this to work (see above).

In contrast, personal loans based on income, not credit, will charge hefty origination fees and sky-high interest rates if you qualify. However, patients with bad credit history rarely get approved.

500 Credit Score

An FSA loan is the only medical financing alternative for people with 500 credit scores or worse. Where else can people with horrible credentials borrow up to $5,700 yearly while saving money on their taxes and the procedure?

Lenders classify individuals with 500 credit scores as inferior loan candidates with high risks of future default and rarely approve these applications.

For instance, bad credit loans with monthly payments are out of reach for patients with FICO scores in the 500 range. Meanwhile, you can get FSA medical financing through pre-certification.

Interest-Free Medical Loans

Patients with bad credit can use a Healthcare FSA as an interest-free medical procedure loan that reduces their tax burden. The process is straightforward, as you will quickly see.


First, explore using your FSA to self-create a medical loan with a zero percent interest rate. The process works best for elective procedures, those you schedule in advance at a time convenient for the patient and provider.

Follow these steps for interest-free financing of your medical procedure.

  1. Pre-certify that the procedure is medically necessary
  2. Contribute the maximum during the annual open enrollment
  3. Schedule the operation at the beginning of the plan year
  4. Your employer must immediately reimburse qualifying expenses
  5. Repay your employer over the remaining year with zero interest charges

Reduce Taxes

Second, your FSA-enabled medical loan is not only interest-free; it saves additional money on your taxes because you repay the financing using pre-tax payroll contributions.

Repaying your loan using pre-tax dollars reduces the income reported on your W2 form in January of the following year. Lower W2 earnings translate into significant savings on three types of taxes.

Consider this example for a hypothetical married couple (not retired) with a combined AGI of $100,000 who work in California, where both employers offer an FSA. In this case, they save $2,220 in taxes ($5,700 X 38.95%).

  • Federal: 22%
  • State: 9.3%*
  • FICA: 7.65%

* State rates and brackets vary; not all states impose income taxes. Plus, NJ and PA do not recognize cafeteria plans.