Medical debt is one of the most significant financial burdens affecting millions of Americans today.
Whether from unexpected emergencies, surgeries, or ongoing medical treatments, healthcare costs can quickly spiral out of control.
Many people find themselves struggling to pay these medical bills, leading to financial stress, damaged credit, and even negative impacts on their physical and mental well-being.
Homeowners, however, often have the option to reduce this burden by using a Home Equity Line of Credit (HELOC) for medical debt consolidation.
In this article, we’ll explore how a HELOC can be a powerful tool for consolidating medical debt while also examining the broader impact of medical debt on American households.
Growing medical debt in America
Medical debt is a widespread issue in the United States, affecting people across all age groups and income levels.
Government data estimates that Americans collectively owe a minimum of $220 billion in medical debt.
- Around 14 million people (6% of adults) have over $1,000 medical debt.
- Approximately 3 million individuals (1% of adults) owe more than $10,000 in medical bills.
This burden has only grown in recent years due to rising healthcare costs, high deductibles, and out-of-pocket expenses not covered by insurance.
Medical debt and debt collectors
Additionally, over $88 billion in medical debt is currently in collections, making it the leading source of debt sent to collection agencies.
Many Americans face the impossible choice of paying for life-saving treatments or covering everyday expenses such as rent and groceries.
As a result, medical debt often accumulates rapidly, leaving individuals and families financially overwhelmed.
How medical debt can affect your life
Unpaid medical debt can have far-reaching effects on your financial, physical, and emotional well-being.
The following are just a few ways medical debt can negatively impact your life.
Damage to your credit score
Unpaid medical debt can severely damage your credit score if it goes unpaid for an extended time.
Once medical bills are sent to collections, they appear on your credit report and hurt your score, making it harder to qualify for:
- Loans
- Mortgages
- Credit cards
This can spark a cycle of financial strain, as poor credit leads to higher interest rates on future borrowing.
Stress and anxiety
Medical debt can also have negative effects on your mental health.
The constant pressure of owing money, dealing with collection agencies, and worrying about how to pay your bills can lead to chronic stress and anxiety.
Studies have shown that financial stress is a major contributor to depression, sleep disorders, and other mental health challenges.
Health impacts
Ironically, the stress caused by medical debt can also negatively impact your physical health.
Many individuals with high medical debt avoid seeking further medical treatment, even if they need it, due to the fear of accumulating more debt.
This can lead to untreated health conditions, worsening symptoms, and additional medical complications down the road.
Limited access to financial opportunities
Medical debt can also limit your ability to pursue major financial opportunities, such as:
- Buying a home
- Starting a business
- Saving for retirement
When a significant portion of your income is dedicated to paying medical bills, investing in other important areas of your life is difficult, leaving you financially trapped.
Given these negative impacts, addressing medical debt as soon as possible is crucial.
One effective strategy is consolidating your debt with a HELOC.
Why you should address medical debt quickly
Medical debt doesn’t just go away. The longer it lingers, the more likely it is to damage your financial stability and well-being.
Addressing medical debt quickly is essential for several reasons:
- Prevent collections: Once medical debt is sent to collections, it may stay on your credit report for up to seven years, lowering your credit score and making future financial opportunities more expensive.
- Avoid lawsuits: In some cases, unpaid medical bills can result in lawsuits. If you lose, your wages could be garnished, or a lien could be placed on your property.
- Reduce stress: Consolidating medical debt into one manageable payment helps relieve the stress of multiple bills and due dates.
- Restore your credit: Paying off medical debt, especially if it’s gone to collections, can help improve your credit score over time, opening up future financial opportunities.
Get HELOC funding in as little as 10 days
To help you address your medical debt quickly, HomeEQ offers a streamlined and efficient process for HELOC borrowers.
Use our easy online HELOC application to find out quickly if you’re approved. From there, our experienced team works to collect your documents, expedite the credit check and underwriting, and schedule a home appraisal.
Be on your way to a debt-free life in as little as 10 days with a HELOC from HomeEQ.
How a HELOC can help with medical debt consolidation
A HELOC enables homeowners to borrow against their home equity, making it a smart choice for consolidating medical debt.
Here’s how it helps:
- Lower interest rates: HELOCs offer lower rates than credit cards and personal loans, reducing the total interest paid on medical debt.
- Flexible borrowing: You can borrow only what you need when needed, which is ideal for ongoing medical expenses.
- Interest-only payments: Many HELOCs allow this for up to 10 years, keeping monthly costs manageable while addressing medical bills.
- Simplified finances: Combining multiple medical bills into one HELOC payment simplifies your finances and makes it easier to stay organized and pay off debt.
Conclusion: Take control of your medical debt with a HELOC
Medical debt may seriously impact your financial health, mental well-being, and overall quality of life.
Consolidating your medical debt using a HELOC can be a highly effective way to lower your interest rates, simplify your payments, and reduce the stress of multiple medical bills.
By tapping into your home equity, you can take control of your medical debt and work toward a more secure financial future.
A HELOC for medical debt solutions
If you’re struggling with medical debt, consider using a HELOC as a tool for debt consolidation and start taking steps to improve your financial debt challenges today.
Use HomeEQs fast and fully digital HELOC application today.