Medical Debt Consolidation | The bank rate

An unexpected surgery, illness, or accident can derail a household’s finances, especially if you don’t have insurance or it doesn’t add up to a large portion of the bill.

If you have a large medical debt and simply cutting expenses won’t help you pay it off, there are options that can provide you with medical debt relief.

Can you consolidate medical debt?

You can consolidate medical debt, but the better question is whether you should.

First, ask yourself if you can manage multiple payments to doctors, hospitals, and testing centers without consolidating your debt into one payment. Because the reason for the doctor’s visit can often be unexpected – such as an unexpected health problem or a trip to the emergency room – many people are unprepared for the bills that follow. But before you assume you can’t handle the debt, take the time to assess your expenses and your ability to pay. Are the payments feasible if you rework your budget? If so, it may not make sense to consolidate your medical debt.

Consolidating medical bills involves taking out a loan, which may mean you will be charged interest. On the other hand, medical debt, regardless of its duration, will never bear interest. So while your monthly payment may be lower if you consolidate your medical bills into one loan, you’ll likely pay more in the long run once you factor in interest payments.

If you really can’t afford to pay your medical bills, don’t assume debt consolidation is your only option. If you can find a way to pay off your medical debt without damaging your credit, paying more interest, or putting additional strain on your finances, you should consider it.

But if you can’t find a way to get medical debt relief and other types of debt are pressing you, medical debt consolidation might be the best approach.

How to consolidate medical debt

Debt consolidation for medical expenses involves getting a loan, paying off the medical debt, and repaying the loan as quickly as possible to avoid excessive interest charges. Here are some of the best ways to consolidate medical debt.

personal debt consolidation loan

You can find debt consolidation loans regardless of your credit score; However, you will need a good to excellent credit score to qualify for great rates.

But once approved, you can use the money however you want. Pay off a large medical bill on top of your credit card debt, or just focus on multiple medical bills. Look for a low interest rate and the ability to pay off the loan sooner without penalties.

Credit card

Consolidating medical debt with a credit card can be risky, but you can avoid having to pay interest. First, apply for a credit card with an introductory offer of 0% APR on new purchases. You may be able to find a credit card that offers 0% interest for up to 21 months. These credit cards generally require good to excellent credit, so you probably won’t be approved if your credit isn’t strong.

Use the 0% balance transfer credit card to pay one or more medical bills. Then, work on paying off the credit card as soon as possible, and certainly before the end of the introductory period and scheduled interest rate increases. If you can’t guarantee that you’ll be able to pay off the card on time, consider other bundling options.

Debt management program

A debt management program can take several years to be successful, but this is another option for consolidating medical bills. An agency will work on your behalf to negotiate a voluntary agreement between you and all parties to whom you owe money. You will then make monthly payments to the agency, which will then repay your creditors.

The benefit of this process is that you can save on finance charges and other fees. But it also means you should only consider it if your medical debt has been sent to collections or if you are transferring your medical debt with other debt accounts in the program.

What to do if your medical debt is in collection

Medical debt only affects your credit score if it’s reported. It is highly unlikely that a hospital or doctor’s office will report an unpaid bill. But once it is turned over to a collection agency, it will likely be reported.

If your debt is already in collection, it’s time to enter recovery mode. Pay off medical debt collection as soon as possible. Remember that you can negotiate directly with the collection agency to try to reduce the total amount owed.

Unfortunately, medical debt can stay on your credit report for up to seven years. While waiting for it to be removed, do your best to increase your score by improving your available debt-to-credit ratio and avoiding late payments on other accounts.

Alternative Medical Debt Relief Options

If you want to avoid medical debt consolidation, there are other medical debt relief options to consider. See if any of the following options meet your financial needs.

To negotiate

Until your debt has been released to collections, you can negotiate your medical bills directly with your medical provider’s office or institution. You can take two approaches to this.

If you don’t have insurance, ask if they can reduce the overall bill. Discounts are often given to insurance companies, so don’t be afraid to ask for the same courtesy.

If insurance has already paid part of your bill, try to negotiate your payments. Inform the billing office of an amount you can afford and see if they agree. Chances are they’ll work with you to make sure they receive your payment in full, even if it takes longer than expected.

Medical help

Depending on your income and the size of your household, you may be eligible for Medical help, a free or low-cost health coverage program for low-income individuals and families. Eligibility is determined at the state level. After providing proof of income and an itemized list of monthly expenses, your medical expenses could be covered in full if you are approved.

Internal funding

Some medical providers offer in-house financing, even to patients with poor credit. A third party pays the bill for your treatment and places you on a structured reimbursement plan. You’ll have to pay interest, so don’t choose this option if you can pay your bill using an interest-free method.

But if you’re unable to qualify for a credit card or personal loan and can’t afford medical bills otherwise, in-house financing will save you from collections.

Ask for help

If you can ask your family and friends for help, you can pay your medical bills without going into debt. Consider funding options like GoFundMe, where a a third of the site’s donations are intended for medical expenses.

If you’re not comfortable asking for charity, you can always repay those who donated to the extent of your finances, without having to worry about interest or irregularities in your credit report.


Bankruptcy is certainly not the first recommended option for medical debt relief. But if you feel like you’ve exhausted all your other options, you’re not alone. A recent study by university researchers revealed that about 530,000 American families are turning to bankruptcy every year because of medical debt.

Just make sure you understand the facts about bankruptcy before you go through the process.

The bottom line

If you’re wondering how to get out of medical debt, there are several options to consider. But if it makes financial sense, debt consolidation can help you find medical debt relief quickly and without doing too much damage to your credit score.

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