- Check the bill for errors and ask about financial assistance before you borrow. Nonprofit hospitals are required to have financial assistance policies.
- Many providers offer interest-free payment plans. That’s usually cheaper than any loan.
- If you do borrow, a fixed-rate personal loan can be safer than a deferred-interest medical credit card.
A large medical bill can arrive at the worst possible time. Before reaching for a loan, know this: medical bills are often negotiable, frequently contain errors, and can sometimes be reduced or forgiven through assistance programs. A loan should be your last step, not your first.
Step 1: Make sure the bill is right
- Ask for an itemized bill with billing codes, and compare it with your insurer’s Explanation of Benefits (EOB).
- Look for duplicates, services you didn’t receive, or charges your insurer should have covered.
- Appeal insurance denials. You have the right to an internal appeal and, in many cases, an external review.
- Surprise billing protections: the federal No Surprises Act protects many patients from unexpected out-of-network bills for emergency care and some services at in-network facilities.
Step 2: Ask for help and a payment plan
- Financial assistance (charity care): nonprofit hospitals must have written financial assistance policies. Depending on your income, you may qualify for a discount or full forgiveness. Ask for the application.
- Prompt-pay or self-pay discounts: some providers reduce the bill if you pay a lump sum.
- Interest-free payment plans: many hospitals and practices let you spread payments over months with no interest. Get the agreement in writing.
Step 3: If you still need financing, compare options
| Option | Pros | Cons |
|---|---|---|
| Provider payment plan | Often 0% interest, no credit check | May require a set monthly amount |
| Personal loan | Fixed rate and payment, clear payoff date, can cover several bills | Interest and possibly an origination fee; credit check |
| Medical credit card | Promotional periods at 0% interest | Often deferred interest: if not paid in full by the deadline, interest is charged back to the purchase date |
| Regular credit card | Fast | High variable APR |
| HSA/FSA funds | Pre-tax dollars | Limited by your balance |
Example: $2,500 in medical bills financed over 24 months at 22.00% APR = about $129.70 per month, $612.69 in interest, $3,112.69 total. A 24-month interest-free plan with the provider would cost about $104.17 per month and $0 in interest.
If you choose a personal loan, compare APRs from several lenders. Prequalifying uses a soft credit check: see how to prequalify without hurting your credit. Rates depend heavily on your score; see our guides for good, fair and bad credit.
Medical debt and your credit
Medical bills generally don’t show up on credit reports unless they’re sent to collections. The three nationwide credit bureaus (Equifax, Experian and TransUnion) remove paid medical collection debt from reports and don’t report medical collections with an initial balance under $500. Unpaid medical collections above that amount can still appear.
Before converting a medical bill into a loan, consider that you would be turning a debt that is often negotiable and interest-free into one that charges interest and will definitely be reported if you miss payments.
Watch out for
- Signing up for a medical credit card at the front desk without reading the deferred-interest terms
- Paying a bill before your insurer finishes processing the claim
- Collection calls about debts you don’t recognize. Ask for written validation of the debt.
Frequently asked questions
Should I take out a loan to pay medical bills?
Usually only after you’ve checked the bill for errors, asked about financial assistance, and tried to negotiate or set up an interest-free payment plan with the provider.
Do medical bills affect my credit score?
Medical bills generally aren’t reported unless they go to collections. The three major credit bureaus remove paid medical collections and don’t report medical collections under $500.
Are medical credit cards a good idea?
They can work if you pay the full balance before a promotional period ends. Many use deferred interest, which charges all the interest from the start if any balance remains.