Crowdfunding Vs Medical Loans: A Comparative Insight

Crowdfunding refers to the practice of gathering financial support from a large group of people, often through online platforms, to cover medical expenses related to serious conditions such as cancer, accidents, rare diseases, and complex surgical procedures. India faces a critical challenge in healthcare financing due to the high costs that individuals must bear out of pocket. For middle-class patients, the need for funds is pressing which they typically gather from personal savings, family and friends, or by turning to both formal and informal lenders.

A lot of middle-class Indians do not have health insurance, and many who are insured have policies with inadequate coverage, often less than ₹5 lakhs. Medical crowdfunding aims to fill this affordability gap in India. Medical crowdfunding platforms like Milaap have played a crucial role in financing a wide range of treatments, including liver transplants, heart surgeries, cancer care, kidney transplants, and neonatal intensive care. In this way, medical crowdfunding has emerged as a vital solution to the financial barriers that make healthcare inaccessible or prohibitively expensive for many.

Ever thought about how difficult it is to get a medical loan sanctioned? You won’t get a medical loan when you need them most. One may not have all those documents required by the bank for the loan sanction, not to forget the mortgage they would ask for. Also, you are restricted to the city you are located when applying for a bank loan. Even after doing all the time-consuming documentation, there is no guarantee the bank will sanction your loan. With all those difficulties, you may not even get the entire amount you need.

Medical crowdfunding is a collective effort where a community unites to support individuals burdened by overwhelming medical expenses. The process begins with setting up a campaign on a crowdfunding platform, where the campaign creator details the medical condition, the required treatment, the total funds needed, and a deadline for fundraising. This information is crucial in conveying the urgency and financial scope of the situation to potential donors. Once the campaign is live, sharing it widely on social media platforms like Facebook, Instagram, Twitter, and WhatsApp is essential to reach as many people as possible, including friends, family, and even strangers who might empathize with the cause.

Additionally, local news outlets, community groups, and public events can help spread awareness. To maintain donor interest and trust, transparency and regular updates are vital. The campaign creator should keep donors informed about the progress of both fundraising and the medical treatment, sharing images and stories of the patient’s journey to build a deeper connection. Authenticity is also crucial; providing evidence such as medical reports, bills, and prescriptions helps confirm the legitimacy of the need for funds.

As donations are received, the crowdfunding platform typically manages and transfers the funds to the beneficiary according to its policies, enabling the patient to access necessary treatments. Once the fundraising goal is met or the deadline passes, the campaign is concluded. It's important to thank donors and provide a final update on how the funds were used, which not only shows gratitude but also strengthens the sense of community and trust for future campaigns.

No limitations on coverage

Unlike medical insurance, which often comes with a cap on coverage and specific exclusions, medical crowdfunding allows you to raise funds without such restrictions. Insurance policies typically have limits on how much they will pay out, and certain treatments or pre-existing conditions may not be covered at all. Crowdfunding, on the other hand, enables you to raise the exact amount needed, regardless of the type of treatment or its cost.

Immediate access to funds

One of the major challenges with medical insurance is the time it takes to process claims and receive payouts. In contrast, medical crowdfunding provides a more immediate solution. Once your campaign is live and donations start coming in, you can access funds quickly, allowing for timely payments for treatments, surgeries, or medications.

No premiums or deductibles

Medical insurance requires regular premium payments, which can be a financial burden, especially if you’re already facing high medical expenses. Additionally, many policies have deductibles that must be met before the insurance company starts covering costs. Medical crowdfunding eliminates these financial hurdles—there are no premiums to pay or deductibles to meet. The money raised goes directly towards the medical expenses you need to cover. Milaap offers a free platform i.e 0% processing fee.

Community support and emotional connection

Crowdfunding goes beyond just raising money; it builds a support network of friends, family, and even strangers who are emotionally invested in your journey. This collective support can provide much-needed encouragement during difficult times, something that traditional insurance does not offer. The personal stories shared through crowdfunding campaigns often resonate with donors, fostering a sense of community and shared purpose.

Flexibility and control

With medical crowdfunding, you have complete control over the funds raised. You can use them as needed for various medical expenses, whether for hospital bills, medications, rehabilitation, or even related costs like travel and accommodation. Insurance companies often dictate how and where the funds can be used, but crowdfunding gives you the flexibility to allocate resources according to your specific needs.

Inclusivity for all medical situations

Medical insurance is often inaccessible to those with pre-existing conditions or those who cannot afford high premiums. In contrast, medical crowdfunding is inclusive and available to anyone in need, regardless of their medical history or financial status. This inclusivity ensures that even those without insurance or with inadequate coverage have a viable option for financing their medical care.

No rejections or denials

Insurance claims can be denied for a variety of reasons, leaving patients in a difficult position. Medical crowdfunding, however, is not subject to the same bureaucratic processes. As long as you can effectively communicate your need and reach out to potential donors, there’s no risk of being denied the support you require.

While both crowdfunding and medical loans offer pathways to manage overwhelming healthcare costs, they serve different needs and come with distinct implications. Medical loans can provide immediate financial relief but often add the burden of debt during an already stressful time. On the other hand, crowdfunding offers a debt-free alternative, rallying community support to raise the necessary funds without the long-term financial strain.

Platforms like Milaap make crowdfunding accessible, transparent, and effective, allowing patients and families to focus on recovery rather than repayment. Milaap’s commitment to making healthcare accessible through crowdfunding makes it the ideal choice for those in need of quick and effective fundraising solutions. Start your medical fundraiser today!