Many people can’t pay cash for rehab. They are already in a bad financial situation because of an ongoing addiction, so they simply don’t have the funds available. In these instances, different forms of financial assistance can make treatment possible.
While insurance coverage is the first place to look to cover the costs of rehab, loans are often the second.
Many rehab facilities offer financing programs where they essentially loan clients the money to pay for treatment, and clients pay off the loan over time, usually in monthly increments. Other institutions also offer loans, which people can use to finance rehab.
The Benefits of Using a Loan to go to Rehab
The average cost of rehab is roughly $3,800 a month, but the exact amount you’ll pay will vary widely depending on the type of program you choose, the intensity of care you need, and any insurance coverage you have.
Chances are that addiction has influenced your financial situation. The costs of funding a drug habit add up quickly, and your substance abuse has likely affected your ability to work well.
While insurance can offset the expense of rehab greatly, few plans fully cover the costs of treatment. This means you’ll have to cover some costs out of pocket, and this can be tough.
If your credit is relatively good, or you have a quality cosigner, you can likely get a loan with a relatively low interest rate to cover the cost of rehab. You can then pay back this loan over time once you are sober and can return to work.
Some treatment facilities offer loans to prospective clients. These usually have different terms than loans from a bank or a credit union. They may be easier to get for people with poor or limited credit.
These loans usually cover the costs of the program upfront, and clients then pay back the loan on a monthly basis once they have graduated from the program.
These financing plans can greatly alleviate financial stress during treatment, allowing clients to fully focus on their recovery.
What are the Risks of Taking Out a Loan?
Those who get a loan from a bank or a credit union for rehab will most likely be getting a personal loan. These loans will usually be unsecured, meaning that you did not put up any collateral to obtain the money. These are dependent on your credit score. If your score is low, you may need to get a cosigner to be approved.
Depending on the cost of rehab and your creditworthiness, you may be able to obtain the total amount needed to pay for treatment. However, if the facility is on the higher end of the cost spectrum, or your credit is subpar, and there is no cosigner, you may only get a portion of what you need to cover your rehab costs. In this instance, you will need to use other methods to get the remainder of the funds.
Some risks associated with personal loans to be aware of include:
- The interest rate may be high.
- If you try to pay it off early, you may encounter penalties.
- The level of privacy may vary.
- Some loans come with precomputed interest.
If a loan seems overly complicated, it is probably best to skip it and look for other sources. You should be able to understand the interest, terms, and other information easily.
The loans offered by rehab facilities are often simple to understand because the facility is used to offering this type of financing to clients. Ask all your questions up front so that there are no surprises down the road.
What Does a Loan Make Sense?
When there is no other viable option to pay for drug treatment, taking out a loan is something to consider.
In 2017, more than 70,200 people died from drug overdoses in the U.S. This figure does not include the people who died due to drug-related violence, conditions like AIDS and hepatitis, and other consequences of drug use.
Getting treatment as soon as possible is imperative to reduce the risk of mortality. While the cost of rehab can seem high, particularly if you don’t have insurance coverage, the investment is well worth it when you consider the costs of addiction.
Many loans have desirable terms, such as relatively low interest and flexible repayment plans.
If a loan is specifically for drug addiction treatment, the lender may work it out so that you do not have to start paying it back until you have been out of rehab for 30 to 90 days.
If you lost your job during active addiction, this gives you time to find employment after completing the program.
Are Other Financial Assistance Options Available?
In addition to the in-house financing that some treatment facilities offer, some may also offer prices on a sliding scale. Sliding scale pricing is typically based on your income level.
Again, health insurance is the first place to look to cover at least part of the costs of rehab. Thanks to the Affordable Care Act, all substance abuse and mental health care services are now viewed as essential health benefits. They must be covered to the same degree that other medical issues are covered.
The exact level of coverage will depend on your specific plan and the state where you live. This information will be in your policy documents that outline the particulars of your plan. You can also contact your insurance provider directly for clarification.
Loans are a viable option to pay for rehab. They can often be combined with other forms of financial assistance to make treatment possible.