Managing Debt

How to Consolidate Medical Bills

Family in kitchen discussing their different options to consolidate their medical bills

In 2016, the Kaiser Family Foundation found that “26 percent of U.S. adults ages 18-64 say they or someone in their household had problems paying or an inability to pay medical bills in the past 12 months.”

Medical expenses and hospital stays that go beyond what your insurance covers can generate large burdens of medical debt, with multiple bills to add to the complexity.

If you find that managing your medical bills is stressing your budget or your mind, medical debt consolidation may be an option to help reduce interest charges and monthly payments, while reducing the complexity of multiple bills to the simplicity of a single bill.

Is medical debt consolidation right for you?

When you first receive any medical bills, you should try to negotiate a payment plan that fits your budget. Most medical debt will include low or no interest against the debt, so finding a payment plan that works will likely be the best way to manage your medical debt.

If, after negotiation, you find you are still unable to meet the monthly payments, there are a few medical debt consolidation options you can pursue to reduce your monthly obligations from your medical debt.

What medical debt consolidation services are available?

The goal of any medical debt consolidation program should be to reduce your monthly payments to a manageable level. While paying your medical bills directly to your health care provider can offer low or no interest charges, multiple medical bills can mean meeting monthly minimums is difficult. When that is the case, you can evaluate these options for medical debt consolidation:

Medical debt counselling services or medical bill advocates

Debt counsellors charge a service fee to evaluate your existing debts and negotiate with your lenders and health care providers to find a payment plan that matches your budget. As you compare debt counseling services, be sure to read reviews of their service and understand the full extent of their fees. You should also understand that, while debt counsellors may suggest a debt settlement for some of your bills, some debt settlements may land on your credit report as a negative resolution of your debt, which can reduce your credit score.

Similar to debt counselors, medical bill advocates charge you a service fee to help negotiate lower bills or more manageable payment plans.

Secured medical debt consolidation loans

A home equity loan from Discover Home Loans is an example of a secured loan, where the amount of the loan is secured by your home’s value. If you are unable to repay the loan, the lender will be able to foreclose on your property. Because of that security, lenders will often provide home equity loans with low interest rates and can extend the life of the loan over a longer period of time (from 5 to 30 years), which often reduces your monthly payments.

Using a secured loan to repay medical debt allows you to quickly wipe out your balances with health care providers with the loan, transferring your debt to the loan’s lender.

While interest rates for a home equity loan are typically below 10%, they are often higher rates of interest than dealing directly with your health care provider.

Unsecured medical debt consolidation loans

While secured loans use the collateral of your home for security, unsecured personal loans typically use your credit history to determine the rates of the loan. Compared with secured loans, unsecured loans will typically have higher interest rates and likely will need to be repaid within 2 to 10 years.

These rates and term lengths can reduce your current monthly medical debt obligations, but you will likely pay more over the life of the loan to interest payments.

While you do not risk foreclosure on your home as you would with a secured loan, an inability to repay an unsecured loan may produce a default on your credit report, which could negatively affect your credit score.

Credit cards

Generally, credit cards will have significantly higher interest rates than your original debt, a secured loan, or an unsecured loan. Therefore, it is not typically recommended to use a credit card to pay off your medical debt.

However, there are two types of credit cards that can offer some help with medical debt: medical credit cards and 0% APR introductory offer cards. Both medical credit cards and 0% APR introductory offer credit cards feature initial periods of low or zero interest. The key here is to calculate if you can repay the debt within that low-interest window. If you think you can repay the full debt before that window closes, the card acts as a low-interest loan during that period. But, when that introductory window expires, you can expect interest rates similar to or greater than a traditional credit card.

How does medical bill consolidation affect your credit score?

On-time payments of your medical bills will not land on your credit report, so you won’t see any positive credit score movement by paying your bills on time. However, failing to repay your medical bills may force your health care provider to push the debt to a collection service. Even moving a debt to a collection agency will land on your credit report as a negative action, which means that you can see your credit score drop.

If you have exhausted your ability to negotiate with your health care provider and find you cannot meet the required monthly payments, many of these medical bill consolidation methods can ensure that your credit history is not negatively affected. Whether you use a debt counseling service or medical bill advocate, secured or unsecured loans, or credit cards with helpful low interest rates, consolidating your outstanding medical debt on the terms of your agreement can prevent your medical bills from hurting your credit.

Finally, remember that some debt counselors will offer to arrange debt settlements with some of the owners of your debt. A debt settlement can sometimes be interpreted as a negative resolution of your debt, which can damage your credit score.

Find your low,
fixed rate

Use our Rate Calculator to find the rate and monthly payment that fits your budget.


Start your application online

or give us a call.

  • Weekdays 8am–Midnight ET
  • Weekends 10am–6pm ET

Start your application online or give us a call.

  • Weekdays 8am–Midnight ET
  • Weekends 10am–6pm ET