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08-Oct-2020 13:59

Medical debt typically has a very low interest rate, and in some cases no interest.By rolling medical debt into a debt consolidation loan or by paying for it with a low-interest credit card, you would have to pay the interest on new account—which in some cases could be more than the original rate.While you can consolidate many different types of existing debt, it is important to first know what the interest rate is on your current loan in order to see if debt consolidation will be helpful.In the case of most medical debt, consolidation might not be the answer if you are hoping to save money on interest payments.For people with a "poor" credit score it may be difficult to get approved for a new loan to use for consolidation.People with "fair" to "exceptional" credit scores will have an easier time getting approved for a new loan, and will also be eligible for a lower interest rate.It is commonly recommended to keep your credit utilization under 30%.

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While debt consolidation is mainly a method of lowering or eliminating mounting debt, it can also have a positive effect on your credit score.

It is also important to know whether you are working with a credit counselor from a not-for-profit organization, or if you are working with a for-profit debt settlement/consolidation firm.