Medical debt consolidation: What it is and how to do it

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An unexpected surgery, illness or accident can derail a household’s finances, especially if you don’t have insurance or it doesn’t pick up a big chunk of the bill.

If you have a large amount of medical debt and simply cutting back on spending isn’t helping you pay it off, there are options that can provide you with medical debt relief.

Can you consolidate medical debt?

You can consolidate medical debt, but better question is whether you should.

First, ask yourself if you can manage multiple payments to doctors, hospitals and testing centers without consolidating your debt into a single payment. Because the reason for the medical visit can often be unexpected — such as an unexpected health issue or trip to the emergency room — many people are unprepared for the bills that follow. But before you assume you can’t manage the debt, take some time to evaluate your expenses and ability to pay. Are the payments doable if you rework your budget? If so, it may not make sense to consolidate your medical debt.

Consolidating medical bills involves taking out a loan, which may mean you’ll be charged interest. In contrast, medical debt, no matter how long it sits, will never accrue interest. So, even though your monthly payment may be less if you consolidate your medical bills into a single loan, you’re likely to pay more in the long run once you factor in interest payments.

If you really can’t afford to pay your medical bills, don’t assume debt consolidation is your only option. If you can find a way to pay your medical debt without damaging your credit, paying more in interest or putting additional strain on your finances, it should be considered.

But if you can’t find a path to medical debt relief and you have other types of debt pressing you, medical debt consolidation could be the best approach.

How to consolidate medical debt

Debt consolidation for medical bills involves securing a loan, paying off the medical debt and repaying the loan as quickly as possible to avoid excessive interest fees. Here are some of the best ways to consolidate medical debt.

Personal debt consolidation loan

You can find debt consolidation loans regardless of your credit score; however, you’ll need a good to excellent credit score to qualify for favorable rates.

But once approved, you can use the money as desired. Pay off one large medical bill along with your credit card debt or focus solely on multiple medical bills. Look for a low interest rate and the ability to pay back the loan sooner without penalties.

Credit card

Consolidating medical debt by credit card can be risky, but it’s possible to avoid having to pay interest. First, apply for a credit card with an introductory offer of 0 percent APR on new purchases. You might be able to find a credit card that offers 0 percent interest for up to 21 months. These credit cards typically require good to excellent credit, so you likely won’t be approved if your credit isn’t in solid shape.

Use the 0 percent balance transfer credit card to pay off one medical bill or multiple bills. Then, work on paying off the credit card as quickly as possible, and certainly by the time the introductory period ends and interest rate increases are scheduled to kick in. If you can’t guarantee you can pay off the card in time, consider other consolidation options.

Debt management program

A debt management program can take several years to prove successful, but it is another medical bill consolidation option. An agency will work on your behalf to negotiate a voluntary agreement between you and all the parties you owe money. You’ll then make monthly payments to the agency, who will then pay off your creditors.

The benefit to this process is that you can save on finance charges and other fees. But this also means you should only consider it if your medical debt has been sent to collections or if you’re rolling your medical debt with other debt accounts into the program.

What to do if your medical debt is in collections

Medical debt only affects your credit score if it’s reported. A hospital or doctor’s office is very unlikely to report an outstanding bill. But once it’s handed over to a collection agency, it likely will be reported.

If your debt is already in collections, it’s time to enter recovery mode. Pay off the medical debt collection as quickly as possible. Don’t forget you can negotiate directly with the collection agency to try and lower your total amount due.

Unfortunately, medical debt can remain on your credit report for up to seven years. While you’re waiting for it to be removed, do your best to raise your score by improving your debt-to-available-credit ratio and avoiding late payments on other accounts.

Alternative medical debt relief options

If you want to avoid medical debt consolidation, there are alternative medical debt relief options to consider. See if any of the following options meet your financial needs.


As long as your debt hasn’t been turned over to collections, you can negotiate your medical bills directly with your medical provider’s office or institution. You can take two approaches to this.

If you don’t have insurance, ask if they can lower the overall bill. Discounts are often given to insurance companies, so don’t be afraid to ask for the same courtesy.

If insurance has already paid for a portion of your bill, try negotiating your payments. Let the billing office know an amount that you can afford and see if they’ll agree to it. Chances are, they’ll work with you to make sure they receive your payment in full, even if it takes longer than originally anticipated.


Based on your income and household size, you may qualify for Medicaid, a free or low-cost health coverage program for low-income individuals and families. Eligibility is determined at the state level. After providing proof of income and an itemized list of monthly expenses, your medical bills could be covered in full if you’re approved.

In-house financing

Some medical providers offer in-house financing, even to patients with poor credit. A third party foots the bill for your treatment and places you on a structured repayment plan. You will have to pay interest, so don’t choose this option if you can pay for your bill using an interest-free method.

But if you’re unable to qualify for a credit card or personal loan and cannot pay the medical bills otherwise, in-house financing will keep you out of collections.

Ask for help

If you can ask family and friends for help, you could pay off your medical bills without having to go into debt. Consider funding options like GoFundMe, where a third of the site’s donations are for medical expenses.

If you’re not comfortable asking for charity, you can always pay back those who donated as your finances allow, without having to worry about interest or dings to your credit report.


Bankruptcy certainly isn’t the recommended first option for medical debt relief. But if you feel like you’ve exhausted all your other options, you’re not alone. A recent study from academic researchers found that an estimated 530,000 American families turn to bankruptcy each year because of medical debt.

Just make sure you understand the facts about bankruptcy before committing to the process.

The bottom line

If you’re wondering how to get out of medical debt, there are several options to consider. But if it makes financial sense, debt consolidation can help you find medical debt relief quickly and without causing too much damage to your credit score.