Medical Bill Consolidation
Medical emergencies come out of nowhere. Illnesses, accidents and the like can suddenly arise and wreak havoc not only on your health and safety, but on your budget as well. Sometimes, the money that you can get from your insurance company may not be enough to pay for the medical expenses that you’ve incurred. What makes it worse is that some medical providers demand full payment or get creditors to run after you, making it hard for those who don’t have enough money to pay off their debts. If you’re struggling to pay your medical expenses, consider doing medical bill consolidation.
What is medical bill consolidation?
Medical bill consolidation is an option available for those who are having difficulties paying for their medical expenses. Consolidating medical bills simply means combining all of these debts into a single account which requires only one monthly payment that is of a lower amount compared to the multiple monthly payments the debtor will need to juggle previously. What’s good about medical bill consolidation is that you can consolidate all of your other loans and debts together with your medical expenses so that it would be even easier for you to manage your finances. This effectively makes it easier for the person to make the payments regularly and on time.
There are several benefits that you can enjoy should you choose to consolidate your bills. These include:
* Easier way to manage your finances. By consolidating your bills, you do not have to juggle different loans and debts anymore. Everything is put into a single account, and you only need to pay a single sum monthly.
* Gives you more money monthly. Not only does bill consolidation allow you to make only a single monthly payment, the amount you will be paying will also be smaller compared to what you were paying in the past, as medical bill consolidation has a longer payment duration. As such, you will have a little bit extra every month which you can use according to how you see fit.
* Protecting your credit score. Those who are struggling to pay their debts often end up declaring bankruptcy. While this will undoubtedly relieve them of their financial burden, this option doesn’t come without a price; bankruptcy will be on your record for several years, and can prevent you from applying for loans in the future, among other things. Choosing to consolidate your loans will not affect your credit score so you won’t be in danger of having that on your record. Also, in the event that you go into default, your record will only show that you had problems with a single financial institution, not several.
Options for medical bill consolidation
You have two options if you’re considering consolidating your medical bills into a single account. These are:
* Through a bank loan. One way for you to medical bill consolidation is to apply for a loan from a bank. The money from the loan will then be sent to your health care providers in order to pay off your debts. This will free you from the burden of having to pay them, and instead, your debt will now belong to the bank that you got the loan from. This option is chosen by families that have low medical debts and good credit standing, since they won’t have any difficulties getting their loan application approved.
There are two kinds of bank loans for bill consolidation: secured and unsecured. Secured loans require collateral, such as your house or your car, in order for your loan to be approved. Should you default on payments, the bank will take the collateral to pay off your debt, so it’s possible for you to lose your property if you are not able to pay back the debt. Unsecured loans don’t require collateral, however, these usually have a higher interest rate compared to secured loans.
* Through an agency. Alternatively, you can get medical bill help from an agency, which will do the bill consolidation for you. In this situation, the agency will be responsible with coordinating and negotiating with your creditors and other interested parties (including the hospitals, doctors, and health care providers) to settle the bill. They will liaise between you and your creditors in order to help come up with a payment plan that is agreeable to all parties. These agencies can potentially save you thousands, while requiring you to pay a small fee in exchange for their services.
Certainly, it’s possible for you to do the negotiation with the creditors yourself. However, this can take you a lot of time. Agencies are already experienced in the negotiation process, so they will be able to act in your behalf in order to get the best deal for you.
Do note that hiring an agency can affect your credit score, as your debts can show on your record as being settled instead of paid in full. As such, be sure to talk with their representatives regarding this matter so you will know what exactly you’re signing up for.
Is medical bill consolidation for you?
Bill consolidation is quite helpful, however, it also has its own share of downsides. For one, while you may be paying smaller sums of money monthly, it’s still possible that you will be spending more when you consolidate, as you will be paying your debts for a longer period of time. There is also the possibility of losing a property, even your home, should you apply for a secured loan. These are why some individuals hold off on consolidating their loans first and try to save more money to pay off their debts to see if these lifestyle changes may be enough to pay off their debts. Because of this downside, be sure to weigh what advantages you can get out of consolidation versus what the potential costs will be so you can determine whether this is truly the right option for you or not.
No matter how well you budget your funds, a medical emergency can put a spoke in your finance wheel. If you’re having paying your medical expenses, talk with your financial adviser to get some advice about whether medical bill consolidation is right for you.