Consolidate your medical debt and bills.
With millions of American struggling with health care expenses, consolidating medical debt is becoming more common and is a great option for people to consider.
While some forms of consolidation deal only with medical and hospital bills or debt, others may combine several unrelated accounts. There are multiple options to consider when dealing with medical expenses, however consolidation is an excellent option for certain situations. This option can go a long way towards helping people save money on their monthly payments and allow them to pay off their debts in less time.
If a family cannot quality for charity assistance, free health care, or Medicaid, a plan to consolidate medical debt may be a great option to help them stay afloat and get back on track with their finances. It is also a good option for patients that are faced with a higher interest rare. For those families, there are a number of methods to consolidate medical debt. Not all are equally attractive, and it is important to consider all aspects of the situation before committing to a plan for repayment.
Types of medical debt consolidation
You will find two ways to consolidate your medical debt. The most common option is to use an unsecured personal loan. This involves a bank or other lender reviewing your financial situation, including employment status, how timely you have paid bills in the past, your credit rating, and more.
If the lender decides to proceed, they will provide you with a loan that can be used to pay off your existing bills at each health care provider. The key is to ensure that the new loan has a lower interest rate than your existing debts. This tends to be a feasible option for people that do not owe too much money, and that may have better credit scores.
Even if you can provide collateral for a secured loan, many experts advise clients to still consolidate medical debt with unsecured loans because it reduces your risk in the event that payments cannot be made. This will put the consumer at less risk if something were to go wrong. So therefore you will not lose any collateral from an unsecured loan. Read more on unsecured loans.
The second option is a medical debt consolidation program. This involves you working with a third party, such as a non profit agency, debt settlement company, credit counselor, or other professional. You can give them your approval so they can contact each of your doctors, hospitals, and other health care providers to negotiate a reduced interest rate or a better payment plan. Some programs may be able to reduce your medical debt by up to 50%.
There are a few things to be aware of. Depending on the company you use, this type of medical debt consolidation could negatively impact your credit scores. If your outstanding debt is later reported to credit bureaus as settled and not paid in full then your credit scores and ratings could be reduced. For those consumers that decide to take this path, you need to make sure that your bills and debts are recorded as paid in full.
On the positive side, since you do not have to take out a loan as part of this form of consolidation, the total amount outstanding on your debts does not matter. What this means is that your current credit scores are not an issue, so these types of medical debt consolidation programs tend to be the most realistic option for many families and is the easiest option.
Medical debt settlement is also growing in popularity. This may be more of an extreme option for people to consider to deal with unpaid medical and hospital bills, but it can be effective in the right situation. Read more on medical and hospital debt settlement.
Why use a professional to consolidate?
The bottom line is that using a company to assist you with consolidating medical debts and dealing with health care expenses will almost always be more successful than trying to do it on your own. Doctor’s, collectors and hospital billing departments will treat a regular consumer and a professional differently. They know a professional has more information on past practices, more knowledge of consumer rights and the law, and data on how much specific health care expenses should cost.
A hospital billing department is also much less likely to try to “bully” a professional than a unprepared, stressed out individual. If you use a professional for help with your existing medical bills and debts, you have a much better chance to settle for either a lower amount on your debts, or a cheaper payment plan.
Other reasons to use a third party company include negotiating requires skills and experience. While they can be developed over time, many people do not have the luxury of time. It is very stressful in taking constant phone calls from doctors, hospitals, billing departments, and debt collectors. Not to mention how much personal time that takes up. Professionals can take over all these responsibilities and much more. Medical billing advocates may be able to help as well.
With the ever increasing health care costs in our country, the bottom line is that hospital and medical debt consolidation is an important tool to use when trying to get out of debt and pay off your bills.