It may be a good way to get those bills under control.
- Medical debt is forcing Americans to make drastic changes to the way they spend and save.
- If you’re juggling medical bills, it pays to consider consolidating that debt with a personal loan.
Healthcare can come at a high cost — even when you have health insurance. Between premium costs, copays, deductibles, and non-covered services, it’s easy enough to land in medical debt if you fall ill or get hurt out of the blue.
These days, medical debt is forcing people to make tough choices. In a recent survey by Discover, medical debt has forced 32% of Americans to hit pause on their retirement savings, and has forced 36% to hold off on adding money to their emergency funds. And it’s also forced 27% of Americans to stop paying other bills.
If you’re carrying medical debt, you may be struggling to keep up with your various payments. And in that regard, a personal loan could help.
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The upside of getting a personal loan
A personal loan lets you borrow a sum of money for any reason. You can take out a personal loan and use the proceeds to renovate your home, repair your car, or consolidate your credit card balances. Similarly, you can use a personal loan to consolidate your medical bills and make them easier to pay off.
Let’s imagine you’re currently paying off seven different healthcare bills, each of which has its own due date. Juggling those payments and remembering when bills are due can be challenging — especially when you have other things in life to focus on. The upside of getting a personal loan is that you’ll have one payment to deal with every month. And because personal loans come with fixed interest rates, your payments will be predictable.
Meanwhile, personal loans tend to come with competitive interest rates. Granted, these days, consumer borrowing rates are up across the board due to recent actions by the Federal Reserve to raise interest rates. But if you have a strong credit score, you might snag a competitive interest rate on a personal loan, making your payments reasonably affordable.
Don’t let medical debt upend your life
You may need to put certain goals on hold, like saving up a down payment for a home, while you work to pay off your medical debt. But one thing you don’t want to do is fall behind on that debt, as that could damage your credit score and lead to a world of trouble.
If you take out a personal loan and use it to pay off your medical bills, you’ll then be left with a single monthly payment to work into your budget. And that might help alleviate stress at a time when you’re also trying to recover from whatever injury or illness led you to rack up medical debt in the first place.
That said, before you take out a personal loan to pay off your medical debt, reach out to your providers and see if it’s possible to negotiate that debt downward. Some may be willing to work with you. But once you have what you think are your final numbers, it pays to see if a personal loan makes your healthcare debt easier to manage.
The Ascent’s best personal loans for 2022
Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing The Ascent’s best personal loans for 2022.