Start with the bill
Medical bills often have errors or charges you can question. Before you borrow, ask the provider for an itemized bill and compare it with your insurer's explanation of benefits. Look for duplicate charges or services you didn't receive. Call your insurer about any claim that was denied.
Ask about help
These options cost little or nothing. A home equity loan adds interest and puts your home on the line.
Keep notes of each call: the date, who you spoke with and what they offered. If a provider agrees to a discount or a plan, ask for it in writing. If you're dealing with several providers, list each balance, its interest rate, if any, and whether it's in collections. That list makes it easier to see which bills need action first.
- Financial assistance programs, which many nonprofit hospitals are required to offer
- Interest-free payment plans
- A discount for paying in full or for paying without insurance
- Negotiating a lower balance, especially for large bills
When home equity can help
- The balance is large and the provider won't offer a workable plan
- The bills have already moved to high-rate credit cards or a personal loan
- You've been sent to collections and want a clear payoff
- You have steady income and a budget that covers the new payment
Your options
CapCenter home equity loans range from $50,000 to $250,000 at a fixed rate, with ZERO Closing Costs (restrictions apply). For smaller balances, a payment plan or other option may fit better.
- Home equity loan: a lump sum at a fixed rate with a set payment, keeping your first mortgage as is
- Cash-out refinance: replaces your mortgage with a larger loan
- Personal loan: unsecured, but usually at a higher rate
Why it matters
Medical debt often comes with protections that a home loan doesn't. Providers may offer flexible plans, and credit reporting rules for medical debt have changed in recent years. A home equity loan is secured by your home. If you can't make the payments, your home is at risk. Many people treat it as a last resort.
Protect yourself
- Borrow only what you need to pay the bills
- Get payoff letters so you know the exact amounts
- Pay providers directly and keep proof of payment
- Avoid new medical charges on high-rate cards while you repay
Weigh the payment
Before you borrow, compare the new monthly payment with what you'd pay under the providers' plans. A home equity loan spreads the cost over 15, 20 or 30 years, which can make the payment small but the total interest large. If a provider plan would clear the debt in two or three years with no interest, that's usually the cheaper path. If the balances are on cards charging high rates, a fixed-rate loan may save money, as long as you don't run the cards back up.
