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MagnifyMoney: 2016 Housing Affordability Study

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Housing Affordability Study

As the cost of housing soars ever higher and household earnings remain stubbornly stagnant, how realistic is homeownership for young people today?

Saving up for a new home can feel like an endless slog for young working Americans. The upfront costs alone — the down payment, closing costs, property taxes, etc. — are enough to scare off prospective buyers who are struggling to make ends meet.

Just over one-third of Americans under age 35 owned homes as of mid-2016, down 12% from 2010, according to U.S. Census data. While homeownership rates fell across all age groups during that same period, none experienced a steeper drop-off than the under-35s.

MagnifyMoney wanted to figure out how realistic homeownership is for young Americans today — that is, how long it would take them to save up for a new home in their area if they started saving now.

Calculating Home Affordability

Our analysis revealed two different sets of buyers — those who can afford the cost of a new home in their area and those who cannot. Affordability was largely driven by a worker’s ability to qualify for a mortgage loan large enough to cover the cost of a median-priced home in their metro area. Given these two different cases, we used two methods to determine how long it would take these groups to save for a home.

For buyers who can’t afford a large enough mortgage:

We assumed that the borrower can spare 35% of their monthly income toward mortgage-related payments. Based on this amount and the current interest rates for a 30-year fixed-rate mortgage, we calculated the total mortgage that the borrower can afford to take.

We then took the mortgage amount they would qualify for and subtracted it from the cost of a median-priced home in their area to find the mortgage gap they need to fill. Then, we added other necessary upfront costs: 4.5% closing costs and a standard emergency cash reserve equal to one month’s mortgage payment.

We determined, based on the median income for their age, how long it would take to save that amount, assuming a 20% savings rate.

Example:

We estimate a 25 to 44 year-old homebuyer in Salinas, Calif., would reasonably qualify for a $275,385 mortgage. A median-priced home in Salinas, Calif., costs $750,000. So, she would have to save at least $474,615 to fill the mortgage gap. On top of that, she would pay another $33,750 in closing costs (assuming an estimate of 4.5%) and need to set aside a $1,274 emergency cash reserve.

In total, she would need to come up with $509,612 to be able to buy a home in her area. If she saved 20% of her income toward that goal, it would take her 46.75 years.

For buyers who can afford a large enough mortgage:

Once again, we assumed that the borrower can spare 35% of their monthly income toward mortgage-related payments. Based on this amount and the current interest rates for a 30-year fixed-rate mortgage, we calculated the total mortgage the borrower can afford to take.

We then determined how much they’d need to save for a 20% down payment. We added to that the cost of closing costs and a one-month mortgage reserve.

For example:

A median-priced home in Johnstown, Penn., costs $74,900. So this buyer would have to save at least $14,980 to cover a 20% down payment. On top of that, he would pay another $3,370 in closing costs (assuming an estimate of 4.5%) and set aside $1,370 in an emergency cash reserve.

In total, he’d need to save $19,720. Saving 20% of his income toward this goal, it would take him 1.85 years.

Key Findings

  • Get ready for the long haul: Of the 380 metro areas we analyzed, we found no place in America where a worker of any age group could realistically save up for a new home in less than a year.Across all 380 metro areas analyzed…
    • 45 to 65 year-olds would need an average of 4.69 years to save for a home.
    • 25 to 44 year-olds would need an average of 5.63 years to save for a home.
    • 15 to 24 year-olds would an average of 27.2 years to save for a home.
  • Where homeownership is completely out of reach:
    • In 20.79% of metros (79 out of 380), workers of all age groups wouldn’t be able to qualify for a mortgage loan large enough to cover the cost of a median-priced home.
    • 15 to 24 year-olds wouldn’t qualify for a mortgage loan large enough to cover the cost of a median priced home in 357 out of 380 metros analyzed (93.95%).
    • 25 to 44 year-olds wouldn’t qualify for a mortgage loan large enough to cover the cost of a median-priced home in 68 out of 380 metros analyzed (17.89%).
    • 45 to 65 year-olds wouldn’t qualify for a mortgage loan large enough to cover the cost of a median-priced home in 29 out of 380 metros analyzed (7.63%).

The least and most affordable metros for 25 to 44-year-olds

25-44-The-Most-Easiest-Places
25-44-The-Most-Difficult-Places

A closer look at the housing market for 25 to 44-year-olds:

  • The most affordable metro area: Johnstown, Penn., is the easiest place for 25 to 44 year-olds to save for a home. The key: Affordable housing is in abundance. A median-priced home in Johnstown is $74,900. With a goal of saving enough to cover a 20% down payment, closing costs, and a one-month mortgage payment reserve, the total amount workers would need to save is $19,720. Earning the median annual income for that area of $53,164, they would need just 1.85 years to save.
  • The least affordable metro area: Salinas, Calif., is the most difficult metro area for 25 to 44 year-olds dreaming of homeownership. Earning the median annual salary of $54,499 and looking at a median-priced home listed at $750,000, they would need a staggering 46.75 years to save up enough. The reason? On an annual household income of $54,499, a homebuyer would only realistically be able to qualify for a $271,000 30-year fixed-rate mortgage loan, leaving a half-million-dollar gap to fill.
  • Midwest is best: 9 out of the 10 most affordable metro areas are located in the Midwest, where housing prices are significantly lower compared to other regions. On average, it would take just 2.28 years for a 25 to 44 year-old to save for a home in the 10 most affordable metros.
  • California is where homeownership dreams go to die: 9 out of the top 10 most expensive metro areas for 25 to 44 year-old homebuyers are in California.
    • The average time needed to save for a home in the top 10 most expensive metro areas is a whopping 29.15 years.
    • It would take 25 to 44 year-olds at least three years to save for a home in 7.37% of metro areas.
    • It would take 25 to 44 year-olds between three and five years to save for a home in 53.16% of metro areas.
    • It would take 25 to 44 year-olds between five and 10 years to save for a home in 34.47% of metro areas.
    • It would take 25 to 44 year-olds more than 10 years to save for a home in 5.00% of metro areas.

The least and most affordable metros for 45 to 65-year-olds

45-65-The-Most-Easiest-Places
45-65-The-Most-Difficult-Places

A closer look at the housing market for 45 to 65-year-olds:

  • The most affordable metro area: Danville, Ill., is the easiest place for 45 to 65 year-olds to save for a home today. A median-priced home in Danville is $68,200. With goal of saving enough to cover a 20% down payment, closing costs, and a one-month mortgage payment reserve, the total amount workers would need to save is $18,012. Earning the median annual income for their age group in that area ($51,975), they would need just 1.73 years to save.
  • The least affordable metro area: Homeownership dreams don’t get any more realistic with age in Salinas, Calif. It is also the most difficult metro area for 45 to 65 year-olds dreaming of homeownership. Even though this age group earns a median income 22% higher than 25 to 44 year-olds in this area, it would still take them nearly three decades (28.98 years) to save up for a median-priced home of $750,000. On an annual household income of $70,368, a 45 to 65 year-old homebuyer would only realistically be able to qualify for a $377,567 30-year fixed-rate loan, leaving a massive gap to fill — even without including closing costs and a one-month mortgage reserve.
    • It would take 45 to 65 year-olds at least three years to save for a home in 16.32% of metro areas.
    • It would take 45 to 65 year-olds between three and five years to save for a home in 57.37% of metro areas.
    • It would take 45 to 65 year-olds between five and 10 years to save for a home in 23.16% of metro areas.
    • It would take 45 to 65 year-olds more than 10 years to save for a home in 3.16% of metro areas.
  • Midwest is best: 9 out of the 10 most affordable metro areas for 45 to 65 year-olds are also located in the Midwest, where housing prices are significantly lower compared to other regions.
    • On average, it would take just under three years (2.08) to save for a home in the 10 most affordable metros.
  • The California struggle: 9 out of the top 10 most expensive metro areas for 45 to 65 year-old homebuyers also are in California.
    • The average time needed to save for a home in the top 10 most expensive metro areas for this age group is a whopping 19.72 years.

The least and most affordable metros for 15 to 24-year-olds

15-24-The-Easiest-Places
15-24-The-Most-Difficult-Places

A closer look at the housing market for 15 to 24-year olds:

Of course, we don’t know many 15-year-olds who are shopping around for a single-family home these days, but U.S. Census Bureau data limited us to this age range. However, our findings still shine a light into the challenges facing the youngest homebuyers.

  • It would take 15 to 24 year-olds at least three years to save for a home in 0% of metro areas.
  • It would take 15 to 24 year-olds between three and five years to save for a home in 1.58% of metro areas.
  • It would take 15 to 24 year-olds between five and 10 years to save for a home in 23.42% of metro areas.
  • It would take 15 to 24 year-olds more than 10 years to save for a home in 75.00% of metro areas.
  • The most affordable metro area: Sheboygan, Wisc., is the easiest place for 15 to 24 year-olds to save for a home today. Although median-priced homes are relatively more expensive in Sheboygan ($134,900) than other inexpensive metro areas on this list, young workers there earn relatively higher salaries, which enables them to save more toward future home costs. With a goal of saving enough to cover a 20% down payment, closing costs, and a one-month mortgage payment reserve, the total amount workers would need to save is $33,877. Earning the median annual income for their age group in that area ($38,510), they would need just 4.40 years to save.
  • The least affordable metro area: Santa Cruz-Watsonville, Calif., isn’t simply a difficult place for young workers to save for a home — it’s pretty much impossible. On an annual household income of $21,178, a 15 to 24 year-old homebuyer would only realistically be able to qualify for a $36,506 30-year fixed-rate mortgage loan. With a median-priced home listed at $769,500, their mortgage loan would hardly make a dent. They would need 181.27 years to save enough to fill in that gap.
    • In the 10 most expensive metros, it would take 15 to 24 year-olds an average of 129.53 years to save for a home.
  • Things look much better in the South and Midwest: The 10 most affordable metro areas for 15 to 24 year-olds are also located in the Midwest and the South, where housing prices are significantly lower compared to other regions.
    • On average, it would take just under five years (4.79) to save for a home in the 10 most affordable metros.
  • Surprisingly expensive metros for 15 to 24 year-olds:
    • While 6 out of the 10 most expensive metro areas are located in California, there were some surprising findings in other states.
      • The 4th most expensive metro is Corvallis, Ore. Home prices are half as high as the most expensive metros on this list, but median incomes for this age group are among the lowest: $12,369.
      • Morgantown, W.Va., is the 6th most unaffordable metro for the youngest workers. 15 to 24 year-old workers in Morgantown earn among the lowest median incomes in the 380 metros we analyzed: $8,805.

Housing Affordability Calculator

Find out how long it would take you to save up for a home in your area.

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Appendix/Data Sources

Home prices: June 2016 median listing prices data provided by Zillow

Median income: Annual household income by age group and metropolitan area for 2014: U.S. Census Bureau.

Real Estate/Property Taxes: Real estate taxes for owner occupied units for metropolitan areas: U.S. Census Bureau

Mortgage interest rate: Bankrate.com National average on a 30-year fixed rate mortgage is 3.57% as of Sept. 1, 2016.

Downpayment: We assume a downpayment of 20%.

Savings rate: We assume homebuyers would save 20% of their annual take-home pay.

Closing costs: We assume closing costs of 4.5%.

Home Insurance rates by metro area: National Association of Insurance Commissioners (NAIC)

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Mandi Woodruff
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Mandi Woodruff is a writer at MagnifyMoney. You can email Mandi at [email protected]

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Featured, Personal Loans, Reviews

Marcus by Goldman Sachs Review: GS Bank Takes on Online Savings, CDs, and Personal Loans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Marcus by Goldman Sachs savings account

A very high interest rate and no fees make this one of the best savings accounts out there.

APY

Minimum Balance Amount

1.90%

None

  • Minimum opening deposit: None. However, you’ll need to deposit at least $1.00 if you want to earn any interest
  • Monthly account maintenance fee: None
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: None

This is a great account for almost anyone. However, before you click that “Learn More” button below, there are a couple of things to know.

No ATMs. First, Marcus by Goldman Sachs doesn’t offer ATM access to your savings account. You’ll either need to deposit or withdraw money by sending in a physical check, setting up direct deposits, or by moving the money to and from your other bank accounts via ACH or wire transfer.

No checking account. Second, Marcus does’t offer a corresponding checking account. That means you can only use this account as an external place to park your cash from your everyday money flow.

Keeping a separate savings account does have its benefits. For example, it’s harder to tempt yourself to withdraw the cash if you’re a chronic over-spender. But, it also means that there might be a delay of a few days if you need to transfer the money out of your Goldman Sachs online savings account and into your other checking account.

How to open a Goldman Sachs online savings account

It’s really easy to open an online savings account with Marcus by Goldman Sachs. You can do it online or over the phone as long as you’re 18 years or older, have a physical street address, and a Social Security Number or Individual Taxpayer Identification Number.

You’ll be required to sign a form which you can do online, or by mail if you’re opening the account over the phone.

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How their online savings account compares

Marcus’ online savings account can easily be described with one word: outstanding.

You’ll get a relatively high interest rate with this account, which is among the best online savings account rates you’ll find today. In fact, these rates are currently over seven times higher than the average savings account interest rate.

Even better, this account won’t charge you any fees for the privilege of keeping your money stashed there. It’s a tall order to find another bank that offers these high interest rates with terms this good.

Marcus by Goldman Sachs CD rates

Sky-high CD rates, but watch out for early withdrawal limitations.

Term

APY

Minimum Deposit Amount

6 months

0.60%

$500

9 months

0.70%

$500

12 months

2.25%

$500

18 months

2.25%

$500

24 months

2.30%

$500

3 years

2.50%

$500

4 years

2.40%

$500

5 years

2.45%

$500

6 years

2.50%

$500

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty:
    • For CDs under 12 months, 90 days’ worth of interest
    • For CDs of 12 months to 5 years, 270 days’ worth of interest
    • For CDs of 5 years or over, 365 days’ worth of interest

Marcus’ CDs work a little differently from other CDs. Rather than having to set up and fund your account all at once, Goldman Sachs will give you 30 days to fully fund your account.

Once open, your interest will be tallied up and credited to your CD account each month. You can withdraw the interest earned at any time without paying an early withdrawal penalty, but heads up: If you withdraw the interest, your returns will be lower than the stated APY when you opened your account.

If you need to withdraw the money from your CD, you can only do so by pulling out the entire CD balance and paying the required early withdrawal penalty. There is no option for partial withdrawals of your cash.

Finally, once your CD has fully matured, you’ll have a 10-day grace period to withdraw the money, add more funds, and/or switch to a different CD term. If you don’t do anything, Marcus will automatically roll over your CD into another one of the same type, but with the current interest rate of the day.

How to open a Goldman Sachs CD

Marcus has made it super simple to open up a CD. First, you’ll need to be at least 18 years old, and have either a Social Security Number or an Individual Taxpayer Identification Number.

You can open an account easily online, or call them up by phone. You’ll need to sign an account opening form, which you can do online or via a hard-copy mailed form. Then, simply fund your CD account within 30 days, and you’re all set.

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How their CDs compare

The interest rates that Marcus offers on their CDs are top-notch. In fact, a few of their CD terms are among the current contenders for the best CD rates.

If you’re interested in pursuing a CD ladder approach, Marcus is one of our top picks because each of their CD terms offer above-average rates. This means you can rest easy that you’ll get the best rates for your CD ladder without having to complicate things by spreading out all of your CDs among a handful of different banks.

The only downside to these CDs compared with many other banks is that you can’t withdraw a portion of your cash if you need it. It’s either all-in, or all-out. However, once out, you’re still free to open a new CD with the surplus cash, as long as it’s at least the $500 minimum deposit size.

Marcus by Goldman Sachs personal loan

Personal loans offered by Marcus have low APRs, flexible terms, and no fees.

Terms

APR

Credit Required

Fees

Max Loan Amount

36 to 72 months

6.99%-28.99%

Not specified

None

$40,000

Marcus by Goldman Sachs® personal loans can be used for just about anything, from consolidating debt to financing a large home improvement project. They offer some of the best rates available, with APRs as low as 6.99%, and you’ll not only be able to choose between a range of loan terms, but you can also choose the specific day of the month when you want to make your loan payments.

While there are no specific credit requirements to get a loan through Marcus, the company does try to target those that have “prime” credit, which is usually those with a FICO score higher than 660. Even with a less than excellent credit score, you may be able to qualify for a personal loan from Marcus, though, those that have recent, negative marks on their credit report, such as missed payments, will likely be rejected.

Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico) and have a valid U.S. bank account. You are also required to have a Social Security or Individual Tax I.D. Number.

No fees. Marcus charges no extra fees for their personal loans. There is No origination fee associated with getting a loan, but there are also no late fees associated with missing payments. Those missed payments simply accrue more interest and your loan will be extended.

Defer payments. Once you have made on-time payments for a full year, you will have the ability to defer a payment. This means that if an unexpected expense or lost job hurts your budget one month, you can push that payment back by a month without negatively impacting your credit report.

How to apply for a Marcus personal loan

Marcus by Goldman Sachs offers a process that is completely online, allowing you to apply, choose the loan you want, submit all of your documents, and get approved without having to leave home. Here are the steps that you will complete to get a personal loan from Marcus:

  1. Fill out the information that is required in the online application, including your basic personal and financial information, as well as how much you would like to borrow and what you will use the money for.
  2. After a soft pull on your credit, and if you qualify, you will be presented a list of different loan options that may include different rates and terms.
  3. Once you have chosen the loan you want, you will need to provide additional information to verify your identity. You may also be asked for information that can be used to verify your income and you will need to provide your bank account information so that the money can be distributed.
  4. You will receive your funds 1 – 4 business days after your loan has been approved.

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How their personal loans compare

Marcus offers low APRs and flexible terms with their personal loans, but their main feature is that they have no fees. If you are looking for a straightforward lending experience with no hidden fees or costs, Marcus will be perfect for you since you won’t even have to worry about late fees if you happen to miss a payment.

While Marcus offers some great perks, you may be able to get a lower rate if you choose to go with another lender, such as LightStream or SoFi. Both of these lenders offer lower APR ranges and they don’t charge origination fees, though, LightStream will do a hard pull on your credit to preapprove you.

LendingClub and Peerform both have lower credit requirements than Marcus, but they also charge origination fees and, being P2P lending platforms, you will need to wait for your loan to be funded and you run the risk that other users might not fund your loan.

Overall review of Marcus by Goldman Sachs‘ products

Marcus has really hit it out of the park with their personal loans, online savings, and CD accounts. Each of these accounts offers some of the best features available on the market, while shrinking the fees down to a minuscule, or even nonexistent, amount. Their website is also slick and easy to use for online-savvy people.

The only thing we can find to complain about with Marcus is that they don’t offer an equally-awesome checking account to accompany their other deposit products. Indeed, it seems like Marcus has turned their former hoity-toity image around: Today, they’re a bank that we’d recommend to anyone, even blue-collar folks.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
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Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Featured, Health

5 Ways to Keep Medical Debt From Ruining Your Credit

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

iStock

Your physical well-being isn’t the only thing at stake when you go to the hospital. So, too, is your financial health.

According to the Consumer Financial Protection Bureau, more than half of all collection notices on consumer credit reports stem from outstanding medical debt, and roughly 43 million consumers – nearly 20% of all those in the nationwide credit reporting system – have at least one medical collection on their credit report.

Now, you might be inclined to think that, because you’re young or have both a job and health insurance, medical debt poses you no risk. Think again. According to a report from the Kaiser Family Foundation, roughly one-third of non-elderly adults report difficulty paying medical bills. Moreover, roughly 70% of people with medical debt are insured, mostly through employer-sponsored plans.

Not concerned yet? Consider that a medical collection notice on your credit report, even for a small bill, can lower your credit score 100 points or more. You can’t pay your way out of the mess after the fact, either. Medical debt notifications stay on your credit report for seven years after you’ve paid off the bill.

The good news is that you can often prevent medical debt from ruining your credit simply by being attentive and proactive. Here’s how.

Pay close attention to your bills

Certainly, a considerable portion of unpaid medical debt exists on account of bills so large and overwhelming that patients don’t have the ability to cover them. But many unpaid medical debts catch patients completely by surprise, according to Deanna Hathaway, a consumer and small business bankruptcy lawyer in Richmond, Va.

“Most people don’t routinely check their credit reports, assume everything is fine, and then a mark on their credit shows up when they go to buy a car or home,” Hathaway said.

The confusion often traces back to one of two common occurrences, according to Ron Sykstus, a consumer bankruptcy attorney in Birmingham, Ala.

“People usually get caught off guard either because they thought their insurance was supposed to pick something up and it didn’t, or because they paid the bill but it got miscoded and applied to the wrong account,” Sykstus said. “It’s a hassle, but track your payments and make sure they get where they are supposed to get.”

Stay in your network

One of the major ways insured patients wind up with unmanageable medical bills is through services rendered – often not known to the patient – by out-of-network providers, according to Kevin Haney, president of A.S.K. Benefit Solutions.

“You check into an in-network hospital and think you’re covered, but while you’re there, you’re treated by an out-of-network specialist such as an anesthesiologist, and then your coverage isn’t nearly as good,” Haney said. “The medical industry does a poor job of explaining this, and it’s where many people get hurt.”

According to Haney, if you were unknowingly treated by an out-of-network provider, it’s would not be unreasonable for you to contact the provider and ask them to bill you at their in-network rate.

“You can push back on lack of disclosure and negotiate,” Haney said. “They’re accepting much lower amounts for the same service with their in-network patients.”

Work it out with your provider BEFORE your bills are sent to collections

Even if you’re insured and are diligent about staying in-network, medical bills can still become untenable. Whether on account of a high deductible or an even higher out-of-pocket maximum, patients both insured and uninsured encounter medical bills they simply can’t afford to pay.

If you find yourself in this situation, it’s critical to understand that most health care providers turn unpaid debt over to a collection agency, and it’s the agency that in turn reports the debt to the credit bureaus should it remain unpaid.

The key then is to be proactive about working out an arrangement with your health care provider before the debt is ever sent to a collection agency. And make no mistake – most providers are more than happy to work with you, according to Howard Dvorkin, CPA and chairman of Debt.com.

“The health care providers you owe know very well how crushing medical debt is,” he said. “They want to work with you, but they also need to get paid.”

If you receive a bill you can’t afford to pay in its entirety, you should immediately call your provider and negotiate.

“Most providers, if the bill is large, will recognize there’s a good chance you don’t have the money to pay it off all at once, and most of the time, they’ll work with you,” Dvorkin said. “But you have to be proactive about it. Don’t just hope it will go away. Call them immediately, explain your situation and ask for a payment plan.”

If the bill you’re struggling with is from a hospital, you may also have the option to apply for financial aid, according to Thomas Nitzsche, a financial educator with Clearpoint Credit Counseling Solutions, a personal finance counseling firm.

“Most hospitals are required to offer financial aid,” Nitzsche said. “They’ll look at your financials to determine your need, and even if you’re denied, just the act of applying usually extends the window within which you have to pay that bill.”

Negotiate with the collection agency

In the event that your debt is passed along to a collection agency, all is not immediately lost, Sykstus said.

“You can usually negotiate with the collection agency the same as you would with the provider,” he said. “Tell them you’ll work out a payment plan and that, in return, you’re asking them to not report it.”

Most collection agencies, according to Haney, actually have little interest in reporting debt to the credit bureaus.

“The best leverage they have to get you to pay is to threaten to report the bill to the credit agencies,” he said. “That means as soon as they report it, they’ve lost their leverage. So, they’re going to want to talk to you long before they ever report it to the bureau.

“Don’t duck their calls,” he added. “Talk to them and offer to work something out.”

Take out a personal loan

Refinancing your medical debt into a personal loan is another move you can consider making, particularly if you can get a lower interest rate than you could with a credit card, and you aren’t able to secure a 0% credit card deal. Peer-to-peer lender LendingClub has an APR starting at 6.95% and Prosper starts with an APR as low as 6.95%, and LendingClub‘s origination fee is 1.00% - 6.00%.

Even better, SoFi offers personal loans at a APR as low as 5.99% and has no origination fee (although you do need a relatively high minimum credit score to get a loan, at 680).

MagnifyMoney’s parent company, LendingTree, features a handy personal loan tool* where you can shop for the best loan for you.

*You may or may not be matched with any lender mentioned in this article. Based on your creditworthiness, you may be matched with up to five different lenders in our partner network.

Bottom line

Dealing with medical debt can be particularly stressful, as you have to worry about money matters along with managing health issues. However, having medical debt does not have to spell disaster. If you follow one or more of the steps above, you should be able to keep your finances healthy.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

MagnifyMoney
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Have a question to ask or a story to share? Contact the MagnifyMoney team at [email protected]