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Medical bridging loans

From Money Magazine, June 2005

A US financial giant is offering loans to Australians who are having trouble covering the costs of private medical procedures for themselves or their pets.

Interestingly, as Jeni Harvie reports in the June issue of Money, you'll only be able to get such a loan through participating doctors, dentists or veterinary surgeons. They won't get a commission, but GE Money's ANZ president Tom Gentile says, "It will help practitioners with a professional financing option [for their customers] so they can focus on what they do best, which is providing health care."

For now, the scheme, called CareCredit, will be restricted to dental procedures, eye laser surgery and veterinary care, but the company is leaving its options open.

So why is the GE logo so familiar? It's not surprising, as it dates back to 1892 with the formation of the General Electric Company. It's spread a long way since then, from appliances such as fridges, aircraft engines and lighting to financial services, medical imaging, TV programming and plastics. GE Capital is the world's largest non-bank financial institution.

GE Money hopes to have several hundred practitioners making the loans available by March next year.

GE Money offers a choice of plans — interest-free and extended payment. The interest-free plan covers debt from $500 to $25,000 and customers can choose to repay the loan over three, six or 12 months. Repayments are set at three percent of the balance or 40 percent, whichever is greater. Interest as high as 18.9% kicks in if you don't pay off the loan on time.


Nicola Ballenden, health policy officer with the Australian Consumers Association, has mixed feelings about the product. She fears people may be lured into taking out a loan, discover they can't repay it on time and be hit with steep interest rates … "people can be tempted to over-extend themselves". Ballenden says always read the fine print to know exactly what you're up for, never sign up in the doctor's surgery and give yourself 24 hours to think about it.

For the complete story see Money Magazine's June 2005 issue. Subscribe now.