How does consolidation of medical bills work?
Typically, you’ll take out a debt consolidation loan or low-interest credit card to cover the total debt. You need to make sure any finance is affordable before you apply.
Some clinics offer 0% financing options for a set period of time. If you don’t clear the debt before the offer ends, a high rate of interest may apply. This could become unaffordable.
Not only can debt consolidation reduce the stress of juggling several bills, but it could also cut the cost of borrowing, if you can find a cheaper deal. Medical debt is often associated with countries that have a privatised healthcare system, but it can also occur in the UK.
For example, if you need to pay for things like fertility treatment or cosmetic surgery, which aren’t always covered by the NHS or health insurance. UK citizens can also face charges for accessing medical care when travelling abroad, which is why travel insurance is recommended.
How to consolidate your medical bills
If you’re struggling to keep up with your medical bills, consider contacting your medical providers first. The hospital or healthcare provider may be happy to work with you and offer a payment plan.
However, if you can’t find a solution, there are four main ways you can consolidate your medical bills. The best option for you will depend on your individual circumstances and eligibility.
Personal loan
You could look into taking out a personal loan to consolidate your debts. This may be worth considering if you are able to access a lower interest rate than you’re currently paying. But you may end up paying more interest overall if you spread your repayments over a longer timeframe to reduce your monthly outgoings.
The best rates are usually reserved for those with the highest credit scores.
Secured loan
If you’re a homeowner with medical bills that total around £10,000 or more, you could consider getting a secured loan to consolidate your debts.
Secured loans tend to come with lower interest rates than personal loans and can be easier to access. This is because the loan is tied to your home. However, as a last resort, the lender could repossess your property to claim back funds if you don’t keep up repayments.
Remortgage
If you’re a homeowner and your medical bills add up to a large sum, you could consider remortgaging to consolidate your debt. This involves switching your current mortgage deal to a new mortgage with additional borrowing. You could then use the extra funds to clear your medical bills.
Bear in mind that you may end up paying more towards your mortgage per month. And a longer mortgage term may mean you pay more interest in total.
It’s important to make sure any adjustments are affordable. Falling behind with repayments could, as a last resort, lead to the repossession of your property.
Balance transfer credit card
If you pay multiple medical bills by credit card, you might be able to move them to a new card with a low or 0% interest rate. You may need a good credit score to be eligible and fees can apply.
Will consolidating medical bills affect my credit score?
If you take out a loan or credit card, you may see a temporary dip in your credit score. This is because the lender will perform a hard credit check to see how well you have managed your finances in the past. This helps them to decide whether to lend to you.
But, if you keep up with the repayments, you should see your credit score improve over time.
On the other hand, if you miss payments or take out more credit, this could harm your score and your ability to get finance in the future.
Pros and cons of medical bill consolidation
| Pros | Cons |
| All or some of your debts will be in one place, which may make them more manageable. | It may not be worthwhile if you have a small amount of debt or a low interest rate on your medical bills. |
| You may be able to access lower interest rates. | The best interest rates tend to be reserved for those with the highest credit scores. |
| You could reduce your monthly outgoings. | You could pay more overall if you spread the repayments over a longer timeframe. |
| Your credit score may improve if you keep up with your new loan or credit card repayments. | Your credit score may be damaged if you miss any payments. |
Should I consolidate medical debt?
Whether you should consolidate your medical debt depends on your individual circumstances. Before you decide, you should contact your lenders if you are struggling to pay them. They may be able to help by putting a reduced payment plan in place, for example. Don’t simply stop paying them without coming to an agreement, as this may affect your credit score and lead to a default.
You can also access free financial advice and support from a professional debt specialist. Visit Money Wellness, StepChange, Citizens Advice, National Debtline, or MoneyHelper to find out more.
Check your eligibility for a debt consolidation loan
- Reduce your monthly payments
- Personal and homeowner loans available
- Getting a quote is FREE and won't affect your credit score
Intelligent Lending Ltd is a credit broker, working with a panel of lenders. Homeowner loans are secured against your home.
Disclaimer: All information and links are correct at the time of publishing.
Adele Kitchen
Personal Finance Writer
Adele is a personal finance writer with more than 10 years in the finance industry behind her. She writes clear and engaging guides on all things loans for Ocean, as well as contributing blogs to help people understand their options when it comes to money.
