What if you can’t pay the medical bills?
Are your medical bills and overdue notices piling up on your table? You might be tempted to throw them all away, but that won’t be the best solution. You can’t pretend your debt doesn’t exist even if you think you can’t afford to pay it back.
About 61% of consumers with medical debt reported feeling stressed, while 49% lost sleep over medical bills and 23% were unwilling to repay existing medical debt. Do not give up repaying this debt. Here’s what happens if you don’t pay your medical bills.
What happens if you don’t pay your medical bills?
You will feel stressed
Of course, getting a $200 payday loan without a credit check can be a suitable solution to cover your medical expenses without a credit check. But if you already have a mountain of medical debt that you can’t handle, you might be afraid of phone calls and collection offices.
Some collection agencies have aggressive tactics to return the money unless you write letters begging them to stop these behaviors or find a lawyer to protect you. You may want to offer a reasonable monthly payment and negotiate this arrangement with the doctor’s office or hospital.
Having to apply for payday loans for this purpose also brings added stress. According to research on payday loans in America, most borrowers use payday loans to fund their living expenses over the course of months, while the average borrower is in debt for about five months a year.
Research shows that the first time consumers took out a payday loan, 69% used it to cover utilities, rent or credit card bills, while 16% used it as help with medical bills or auto repair.
Invoices can go to collections
You should take immediate action if the hospital billing department threatens to send your bills to collections. Medical bills on your credit report will seriously hurt your credit rating. You may need to work with the doctor’s office or hospital billing department if you want to avoid having your account sent to the collection agency.
Your credit rating may suffer
The health care provider may not send your account to collections. However, this does not mean that the result will be positive. The hospital may report missed or late payments to credit reporting agencies such as Equifax, Experian, or TransUnion.
Are Medical Bills Affecting Your Credit? Yes, once this information appears on your credit report, it goes into the Payment History category. This category accounts for 35% of your credit rating, so it can significantly lower your rating.
You can find a suitable solution
You should do your best to think about a settlement, payment plan, or some type of arrangement between you and the doctor’s office. The sooner you find a suitable solution, the more likely you are to avoid going to collections or lowering your credit score.
You can get a credit card with a 0% introductory APR for a long time. This option also depends on your credit rating, your ability to repay debt on time, and other factors.
It is possible to buy additional time
Did you know that credit reporting agencies must wait 180 days before posting outstanding debt on your credit report? They count 180 days after receiving information about your unpaid medical debt. In other words, you still have a six-month grace period to try to negotiate that debt and settle it. Otherwise, it will show up on your credit report and damage your rating.
Is a medical loan right for you?
Many people decide to take out a personal loan or a medical loan to finance their bills. It is important that you define whether applying for a medical loan can be a beneficial decision in your situation. It is useful if:
You can afford monthly payments
Many loans can be repaid in monthly installments or installments. If you calculate the total loan amount and it can easily fit into your budget, you can withdraw that money. Make sure you fully understand the loan terms and APR, and get a decent interest rate.
You consolidate your medical debt
Some consumers have high-interest medical bills that want to be consolidated. This decision will help you get a lower interest rate, manage your monthly loan payments, and pay off debt faster.
Do not take out a medical loan if:
You qualify for special programs and grants
Consumers, who are eligible for assistance from government programs, grants, and charities, may not need to apply for a medical loan. Look for alternative solutions or ask your hospital for a hardship plan before you decide to take out a loan.
Borrowers with poor and fair credit (FICO score below 689) may get a high creditor APR. As a result, you will have to pay higher interest rates and the total loan sum might not be affordable for you. If you calculate the total amount and find it too expensive with APRs above 36%, it is better to look for other options.
You cannot neglect your medical debt. If you have a pile of medical bills, you need to find a proper way to get rid of them. Negotiating a hardship plan with your doctor’s office or taking out a medical loan can save you the stress of the unpleasant consequences of non-payment.
If you don’t pay your medical bills on time, your debt can be collected while your credit score can take a big hit. If you want to maintain good credit and protect your credit history, follow our advice and think about the best solution for your current financial situation.