Cancer imposes a significant financial and emotional burden on patients, adversely affecting their quality of life (QoL). Financial toxicity (FT), the economic strain from cancer treatment, can exacerbate psychological distress and lower QoL among patients, families, and society, particularly in a private healthcare system. This study aims to assess the prevalence and severity of FT among cancer patients in Nepal, identify its key predictors, and examine its associations with psychological distress and QoL.

A quantitative cross-sectional study was conducted among 216 cancer patients at the Kathmandu Cancer Center, Bhaktapur, Nepal, a private cancer hospital, using convenience sampling. The data were collected with validated tools: Comprehensive Score for FT Scale (COST), Hospital Anxiety and Depression Scale (HADS), and EORTC Quality of Life Questionnaire (EORTC QLQ-C30). Descriptive statistics were used to summarize study variables. Bivariate analyses (independent t-tests and one-way ANOVA) and Pearson correlation coefficients were conducted to examine associations between FT and socio-demographic, clinical, treatment-related, health system, and financial burden variables, as well as their relationships with psychological distress and QoL. Variables significant at p < 0.05, along with clinically or theoretically relevant covariates, were included in multivariable linear regression models to identify independent correlates of FT and to examine its associations with psychological distress and QoL.

Substantial FT was observed among participants, with 51.9% of participants experiencing severe FT and a mean COST score of 13.87 ± 6.57. In multivariable analysis, key independent correlates of greater FT included incurring debt (B = − 4.495, p < 0.001), affected income (B = − 4.513, p = 0.003), selling assets (B = − 3.775, p < 0.001), reliance on out-of-pocket payments (B = − 0.667, p = 0.018), and frequent treatment schedules (B = − 1.683, p = 0.045). Moreover, FT was strongly associated with greater psychological distress (p < 0.001) and reduced QoL (p < 0.001).

This study shows inequalities in the experience of FT amongst cancer patients in Nepal, disproportionately affecting patients who sell assets or rely on debts, which was in turn associated with poorer mental well-being and QoL. Financial aid through government and non-governmental organizations should prioritize economically disadvantaged populations to mitigate inequalities in care and outcomes.