Advice on assistance with high bills and medical bills - The Bills.com Blog
Bills.com Blog > Other Questions > High Bills and Medical Bills
Advice on assistance with high bills and medical bills
Question: I need help paying off my high medical bills and I know that getting a loan is the best option but I'm really young and don't have any established credit yet. What is the best thing for me to do?
Answer: There are several possible solutions that should help you resolve your outstanding medical bills, but which solution is best for your situation will depend upon numerous factors, includingthe amount of debt, the amount of money you have to put toward that debt, and your credit rating.
In your question, you mention that you would like to obtain a loan to repay these debts; however, you should keep in mind that other options exist to assist consumers with repaying their debts, some of which I will describe below. You will need to carefully consider the costs and repercussions of the various options to decide which is the best choice for you.
If you would like to try take out a loan to repay your medical bills, you may be able to do so despite your lack of credit history. One resource you may want to explore is Prosper, a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. I do not think that borrowing money to repay your medical bills is necessarily the best way to resolve your financial troubles.
First, you should consider that medical providers frequently charge much lower interest rates than the rates charged by other unsecured lenders; before you decide to proceed with a loan, you will need to look closely at the interest rates currently being charged on your debts, and compare those rates to the rates offered to you on a consolidation loan. If you find that the interest rate on the new consolidation loan will be higher than your current rates, a consolidation loan may not be a wise choice. Also, you will need to look at the monthly payments you will be required to pay on a consolidation loan; if the payments are more than you can realistically
afford, you should probably consider alternative solutions. If you are unable to find a loan that fits your needs, or if you decide that a consolidation loan is not a workable solution, you may want to look into alternatives for repaying your debt such as debt settlement or credit counseling.
Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: http://www.bills.com/debthelp/debt/
Before you decide the best way to repay your debts, you may want to consult with a professional debt resolution firm to discuss the options available to you. One option to consider is a Consumer Credit Counseling Service, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would disribute the funds to your creditors, based on the new payment amounts. One benefit of CCCS is that it should not seriously damage your credit score. However, it may have a negative impact on your ability to obtain a loan, as many lenders view enrollment in a CCCS program the same as filing Chapter 13 bankruptcy. There are a few additional drawbacks to CCCS: first, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, the average DMP takes around five
years to pay off your debts, so you must be willing and able to commit to a long-term repayment plan.
You may also want to consider the services offered by debt settlement firms. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people who wish to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payments toward your debts. Many consumers prefer debt settlement programs to CCCS, as debt settlement programs tend to be significantly shorter than CCCS plans, and the monthly payments in debt settlement are usually lower. There is one major drawback to debt settlement programs, though?they will significantly damage your credit while in the program and for at least a year or two afterwards. However, since you mention that you have not yet established a solid credit history, you may want to go ahead and resolve your outstanding debts now, hopefully allowing you to rebuild your credit once you have resolved your debts.
Depending on your income and amount of debt, one of the options I have described above may be able to help you. I encourage you to explore the Bills.com website, http://www.bills.com/debthelp/ to read more about these and other options available to you.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
Submit questions/comments about this post:
Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
© 2006 - 2008Bills.com LLC. All Rights Reserved.
Your One Stop Resource for Saving Money.