Medical Debt and Subprime Borrowing
Findings from the Subprime Lending Data Exploration Project
This brief presents findings on the relationship between medical debt and subprime loan use from the Subprime Lending Data Exploration project. Using data from three sources — administrative data provided by subprime lenders as well as a survey and in-depth interviews with borrowers — the study explores the range of backgrounds and experiences among individuals who use subprime loans and the specific needs that drive borrowing. Medical debt is one of the main themes that emerged from the survey and in-depth interviews. Many individuals reported having such debt, either because they were uninsured for a period of time or because they had insurance that did not cover their expenses. These individuals used subprime loans to help cover medical costs or to cover regular expenses that may have originated from a health-related emergency. The findings suggest that the continuity and quality of health coverage are important factors in financial health and the use of subprime loans.