Loans and Insurance

I think it would be nice if insurance covered the cost of elective procedures in that case due the circumstances, or at least a portion of it. They can't cover it all any more than they would anything else.

Loans. Well, I work in finance. You can't give loans to people who may not be able to pay them back no matter what the issue is. So if you're depressed and need medication or have cancer and need treatment or are in the situation you are bringing up - bottom line is that banks are not charities. If they, or anyone, loaned money to people unable to pay eventually they would go under. Those loans would not get paid back and then the money will have basically have been given away. The only way to judge if someone can pay back a loan is income, debt, an credit score. Until there is a better way, this is just the way things go. I believe this system is flawed, but there's not much that can be done at this point.

Don't get me wrong, I think it's a sucky circumstance to be in. I battle depression for other reasons and have had problems in the past affording my medicine. It would have been nice for someone to give me a way to get it. Unfortunately, it's not the place of a bank to do so. Perhaps a charity for this cause or individuals looking to help out. Not a business that has to stay afloat. less

I didnt mean to give them out to people who couldnt pay them back. Im just saying to give then to people with low incomes. I have a very low income but if I took out a loan I would do everything I could to get it paid off. I didnt mean for you to take it as a charity thing. I just meant to help people like me that have low incomes and can't afford the surgery cost out of pocket in full right now. I would never ask someone to pay that much money for free and get nothing back. If I could find a loan that would pay for just my top surgery and help me with testosterone costs I would surely pay them back everytime I got my check. less

Well, it's not based as much on income as it is a percentage known as DTI (debt to income). So if your income is $1000/m your total debt payments including rent/mortgage should generally be no more than $500/m. Some banks or credit unions will go up to 75% DTI, which would be $750/m. It's not that the low income itself is bad, it's just that managing to keep all expenses under $500/m is REALLY difficult, so qualifying under the DTI ratio becomes harder.

The reason that is set up that was is to adjust for unexpected expenses. I have no doubt you and at least 80% of people who take out loans do so with every intention of paying them back. Sometimes, people's income goes down. Work slows up or something. Or perhaps a car breaks down or an unexpected medical expenses comes up. If your bills are 80% of your income, where is that money going to come from? Then, what if the worst case happens? What if you lose your job all together? Then how will the debt be repaid? Have you saved 6 months of living expenses to cover for this potential?

Generally, I think DTI and credit score is flawed. I think balance sheet and income statements do a better job of showing credit worthiness. They take more time to go through than running a credit report and calculating DTI, so they don't get used. Such is life. Either way, if your expenses are 80% of your income and you have no emergency fund, odds are you won't be getting a loan. It's not a matter of the amount of income. You could make $200,000 a year. If the same thing applies, banks won't lend to you. People with high incomes can still have low credit scores and way too high DTI numbers.

I know the system kinda blows. But especially in today's economy, banks and credit unions have to be careful. Many went under by making subprime loans (loans to low income/low credit score individuals). Because of this, lending standards have gone up a lot and now even highly credited individuals have a hard time getting loans secured. Banking and lending is fundamental to the economy running properly, however, and the banks can't just all give loans without some type of standard for lending. Right now, that's DTI and credit score. I don't think it's perfect, but it's better than all the banks going under.

What you can do is try to build your credit up as much as possible. That way, when your income goes up a little, you're more likely to qualify for a larger loan. No credit is almost worse than bad credit in many cases. You can get an unsecured loan for a very small amount (though it will likely be at an astronomical rate) and do it for a short term. Just keep the money you get in a high yield savings and make the payments each month. That way, when the loan is up, your credit score gets a boost. Hopefully by that time, your income will be up as well and you may be able to qualify for a loan large enough to cover your surgery, or perhaps a starter fund for it. less