Pentagon Federal Credit Union
Log In Accounts
Search
  • Routing # 256078446
  • Partners
  • Member Discounts
  • Wealth
  • Foundation
  • ATMs & Branches
  • About
  • Search
  • Checking & Savings
    • Checking
      • Free Checking
      • Access America Checking
      • All Checking Accounts
    • Savings
      • Premium Online Savings
      • Regular Savings
      • All Savings Accounts
    • Certificates
      • Money Market Certificate
      • Coverdell Education Certificate
      • All Certificates
    • IRAs
      • IRA Certificate
      • IRA Savings Account
      • All IRAs
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Access America Checking - Earn more and Get paid early.
  • Credit Cards
    • Our Cards
      • Credit Cards Overview
    • How Can We Help?
      • Contact Us
      • Disclosures
      • Resource Center
    • Special
      • Choose the perfect card - Open Now
  • Auto
    • Auto Loans
      • Purchase
      • Refinance
      • Car Buying Service
    • Protection
      • Vehicle Protection
      • GAP Coverage
      • Debt Protection
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Unlock your next road trip - Explore Vehicles
  • Mortgage & Home Equity
    • Home
      • Mortgage Home
    • Purchase
      • Apply for a Mortgage
      • PenFed Homes
      • First Time Homebuyer
      • Mortgage Pre-approval
    • HELOC & Refi
      • HELOC
      • Mortgage Refi
    • Loan Types
      • Conventional Loan
      • FHA Loan
      • VA Loan
      • Jumbo Loan
      • VA Refi Loan
    • Tools & Resources
      • Knowledge Center
      • Mortgage Media
      • Mortgage Calculators
      • Contact
    • Special
      • Home affordability sale - View Rates
  • Loans
    • Personal Loans
      • Overview
      • Debt Consolidation
      • Credit Card Consolidation
      • Home Improvement
      • Additional Uses
    • Student Loans
      • Student Loans
    • How Can We Help?
      • Contact Us
      • FAQs
      • Forms
    • Special
      • Personal Loans made easy online
  • Learn
    • Learning Hub
      • Learning Center
      • Mortgage Knowledge Center
      • Financial Assistance Center
      • Natural Disaster Relief Assistance
    • About PenFed
      • About
      • New Members
      • Sponsors
      • FAQs
      • Forms
    • Security & Fraud
      • Security Center
    • How Can We Help?
      • Careers
      • Contact Us
    • Special
      • Learn how we protect your data
  • Join Now
  • Log In
  • Accounts
  • Resources

LEARNING CENTER

To get ahead you have to stay informed.
  1. Home
  2. Learning Center
  3. How to Get Out of Medical Debt

FINANCE

How to Get Out of Medical Debt

EXPECTED READ TIME:3 MINUTES

Published: August 29, 2023

Figuring out how to get out of medical debt can feel like wandering a maze. But believe it or not, you have some powerful tools at your disposal to rein it in — and you don’t have to go it alone.

What We’ll Cover

  • What Is Medical Debt?
  • How Medical Debt Happens
  • How to Avoid Medical Debt 
  • How to Pay Off Medical Debt
  • Will Medical Debt Affect My Credit?
6-Ways-to-Pay-Off-Medical-Debt

What Is Medical Debt?

Medical debt is money you owe for healthcare services that you cannot pay by its due date. It’s one of the most common forms of debt in the U.S., affecting 100 million people across the nation. Most Americans with medical debt owe small amounts — only a quarter of adults with medical debt owe more than $5,000. Even so, medical debt can be hard to manage.

How Medical Debt Happens

There are many complicated factors influencing who ends up in medical debt and how much they owe, but four big factors account for much of the debt:

  • High cost of American healthcare

  • High insurance deductibles 

  • Expensive emergency care

  • Chronic illnesses

Only a quarter of adults with medical debt owe more than $5,000. Even so, medical debt can be hard to manage.

How to Avoid Medical Debt

If you have a major risk factor, it may be difficult to completely avoid medical debt — but there's a lot you can do to minimize and control it.

  • Have insurance

  • Choose a plan according to your specific needs

  • Choose providers in your network

  • Ask for estimates and itemized breakdowns

  • Have an emergency fund

  • Be careful relying on credit cards

Warning

Establish an emergency fund now to get ahead of life’s curveballs.

Learn More

How to Pay Off Medical Debt

Paying down medical debt can be challenging, but here are some steps you can take to start regaining control.

1. Figure Out What You Really Owe

Gather your bills and check for errors like duplicate billing or unauthorized charges. If you don’t recognize charges, reach out to your insurance and healthcare providers to ensure you’re not being billed in error.

Many healthcare providers would rather negotiate than refer your debt to a collection agency.

2. Negotiate Your Debt Down

Many healthcare providers would rather negotiate than refer your debt to a collection agency because agencies cost them money. Often, they’ll set up payment plans with little or no interest if you ask. 

Many medical providers have programs to help people with low incomes or high amounts of debt afford the care they need. These may get your expenses waived or reduced. You may also qualify for a repayment plan based on your monthly income. 

If you don’t have insurance, ask to pay the rate your provider would offer to insurance companies or Medicare. 

If you don’t have insurance, ask to pay the rate your provider would offer to insurance companies or Medicare.

3. Use Credit Carefully

Personal loans are a better option than credit cards because of their lower interest rates and installment payments. Some medical credit cards offer 0% introductory APR, but this is only a good option if you know you can pay off your debt by the time the introductory rate ends. All forms of credit will reflect on your credit score.

Balance Transfers

If you’ve already charged medical bills to your credit card but are struggling to pay them down, a balance transfer could help you pay off your debt. Know what you should look for in a balance transfer credit card before signing up.

credit card icon

Learn what to look for in a balance transfer credit card.

Read More

4. Consider a HELOC or Cash-Out Refinancing

HELOCs tend to have lower interest rates than credit cards and long repayment plans. However, you could lose your home if you fall behind on payments. Cash-out refinancing is another flexible option, but you may end up with higher monthly mortgage payments.

Will Medical Debt Affect My Credit?

Many healthcare providers don’t submit medical debt to credit bureaus, and unreported debt won’t affect your credit report. As of April 2023, medical debt that is reported won’t affect your credit score unless it meets all of the following criteria:

  • Your original debt is $500 or more

  • It’s been sent to collections 

  • It’s more than 365 days past due

If medical debt does somehow end up on your credit report, new rules going into effect July 2023 will remove the debt from your credit report once it’s paid. If left unpaid, it will remain for seven years from the date it became delinquent.

Many healthcare providers don’t submit medical debt to credit bureaus.

The Takeaway

Medical debt happens when we are at our most vulnerable. Thankfully, there are actions you can take to protect yourself from debt and pay it off.

Learn How to Prepare for and Survive a Recession

Find out what a recession is, how long they last, and how you can protect yourself financially.

Learn More

SIMILAR ARTICLES

Debt Consolidation vs. Debt Settlement: What's the Difference?

Looking for ways to manage your debt? Compare the key factors of debt consolidation vs. debt settlement to help you decide what might be best for you.

man using pigi bank

How to Pay Off Credit Card Debt

Making a plan to pay off credit card debt will help you manage your finances and pay off credit card debt faster. Here are a few ways PenFed recommends to manage debt.

hands typing at computer

5 Ways to Consolidate Credit Card Debt

Consolidating your credit card debt can save you money, simplify repayment, and help you pay off debt faster.

consolidating credit card debt balance transfer

Your Personal Loan Questions Answered

A personal loan can make life much easier, but there's more to it than just signing on the dotted line. Here's what you need to know.

personal loan questions
  • ATMs & Branches
  • Careers
  • Foundation
  • Contact Us
  • Security Center

This credit union is federally insured by the National Credit Union Administration. Rates are current as of May 2025 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


  • facebook
  • twitter
  • linkedin
  • youtube
  • instagram
Download the PenFed app on Apple Store Download the PenFed app on Google Play
Read More about Equal Housing
Routing #256078446

©2025 Pentagon Federal Credit Union

Privacy
Disclosures
Fees
Rates
Forms
Site Map

Head’s Up!

You are about to visit a third-party site not affiliated with PenFed.org.

penfedcu.sparrowfi.com sparrowfi.com penfed and traveller logo penfed and seguros logo penfed and national car logo penfed and trustage logo PenFed and CampusDoor logo PenFed and Ascent logo PenFed and Ascent logo penfed and househappy logo penfed and benefit services logo penfed and chubb logo penfed and alpha logo penfed and crutchfield logo penfed and ftd logo

This content is from a third-party website. PenFed Credit Union is not responsible for its information.

Continue

Get Started

×

LOGIN

JOIN