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Medical bills can represent a major financial challenge for many households, and sometimes they can contain errors. These mistakes can mean you’re overcharged and make unnecessary payments.

By learning how to scan your medical bills for errors, you can potentially save money and avoid stress.

How Common Are Medical Billing Errors?

Some studies have found that up to 80% of medical bills have errors. Such factors as frequently updated billing codes can wind up triggering erroneous charges.

With medical bills so complicated and medical errors so prevalent, it’s no wonder that the amount of medical debt in the U.S. is so high. One recent study found that Americans owe $220 billion in medical debt, and 14% of U.S. adults owe more than $1,000 in medical debt. What’s more, about 3 million citizens have medical debt that’s over $10,000.

One other statistic: Nearly 40% of adults with medical debt say they cut back on the needs of life (food, utilities, and rent, for instance), and 41% dipped into savings to pay off what they owe for healthcare services.

What Are Some Common Medical Billing Errors?

When medical billing inaccuracies emerge, they can either be purposeful or genuinely accidental. Either way, there are some frequent errors you may want to keep an eye out for.

Was the Bill Sent to Your Insurance Company?

If you have insurance, making sure your provider submitted a timely claim to the insurance company can be a good first step to take. Occasionally, providers may neglect to send the bill to your insurance company at all and charge you for the entire amount.

Your claim could also be denied if the provider didn’t have the right insurance information for you — even if the ID is off by just one digit. You’re already paying an insurance premium, so paying for the entire procedure out-of-pocket could boost your overall medical costs.

Were You Charged for Services You Didn’t Receive?

You may have to ask for an itemized list of all the charges in your bill, but verifying that you are only being billed for services or treatments that you actually received may be wise.

You may also want to confirm that the quantities are also correct — so you’re not being billed for two MRI scans when you only got one. The itemized bill should include prices, so checking that no extra zeros were added by mistake may be a good step in this process.

Was the Wrong Billing Code Used?

If your insurer denies coverage for a procedure or medication, you may be able to identify the correct billing code and request that the provider refile the claim. If you have questions about the codes used, checking with the medical provider and insurer may save you some research time.

One type of billing code error is known as upcoding. This is when the provider bills for a longer session than was provided (for example, being billed for a 60-minute session when you were only seen for 15 minutes). Another common error is known as unbundling, which refers to using codes for each component part of a procedure rather than a single code that covers them all.

Appealing an Insurance Denial

If you find an error during your hospital bill review, you may be able to file an appeal with your insurer if the charge was denied and you were billed for it. Appeal instructions can usually be found on the explanation of benefits received from your insurance company. Documentation to back up your appeal, such as medical records, can often help strengthen your case. The Patient Advocate Foundation offers a detailed guide to the insurance appeal process, including a sample letter.

There is usually a time limit to submit an appeal to the company providing your health insurance, which is typically 180 days, depending on the insurer. Insurers may provide a decision within 60 days. If you disagree with the decision, you can ask for an independent review — your insurer should provide you with information on how to do this.

If your appeals aren’t successful, you may wish to turn to one of several advocacy groups. For example, the Patient Advocate Foundation offers one-on-one assistance at no charge, and its website also lists organizations that provide help for people with specific conditions. People with Medicare can access free counseling through the State Health Insurance Assistance Program.

If you’re still stuck, hiring a medical billing advocate to represent you may be helpful. These professionals typically charge an hourly rate or take a percentage of the money they save you.


Recommended: How to Apply for a Personal Loan

What Are Some Options for Paying Off Medical Bills?

Even if you find errors in your medical bills and are able to resolve them, chances are this won’t eliminate what you owe entirely. Here are some ways you can approach paying off medical debt:

Negotiating a Reduced Bill or Payment Plan

Even if your bills don’t include any mistakes, they aren’t necessarily set in stone. If you’re having trouble making a payment, calling your provider’s billing department and explaining your situation may be the best first step to take.

Some may be willing to negotiate your medical bills, possibly lowering your fees if you make the payment in cash or in a lump sum.

You may be able to gain additional leverage by asserting, politely and accurately, that the provider charged an unfair rate, bolstered by research on average prices in your area and what Medicare allows for the service.

Even if you can’t get your payment reduced, you may be able to extend the due date. Many providers and hospitals will work with you to set up an affordable payment plan, sometimes without charging interest.

Budgeting for the Unexpected

Medical bills can pack an unexpected punch to an already tight budget. If you’ve already used some of the strategies listed above to reduce what you owe, it might be necessary to reduce expenses or increase income while you pay medical bills.

Taking a look at current spending is a good place to start. Determine whether there is nonessential spending that could be put toward what is owed.

If there is absolutely no wiggle room at all, you might consider increasing your income by taking on a side hustle or asking for a raise.

Once you find a way to include medical payments into your budget, using a spending tracker could be a helpful way to make sure you have the funds available each month.

Using a Credit Card

Paying medical bills with a credit card is certainly an option. It might be a quick and initially easy option, but it might not be the best. Credit cards typically charge high interest rates, which could make your medical debt larger over time. One solution might be to look for a no-interest credit card.

You’ll also want to create a debt reduction plan so that you can pay the balance in full before the promotional period ends.

Taking Out a Personal Loan

A personal loan can be a smart way to pay off medical debt. This type of loan is typically unsecured, meaning you are not putting your home or any other asset on the line.

A personal loan can be used for many purposes, including paying off medical bills, but typically comes with much lower interest rates than credit cards or payday loans.

Note that you can use a personal loan calculator to see how much interest you could save by using a loan to pay off a credit card.

Recommended: A Guide to Unsecured Personal Loans

The Takeaway

Taking time to review medical bills and making sure there are no errors can save time and money in the long run. Understanding medical bills and the insurance appeals process — if that’s a step you have to take — can be confusing, so getting assistance is sometimes helpful.

Keep in mind that even if you’re able to resolve the medical billing error, you may still owe money. There are different strategies for paying off medical debt. You may decide to try negotiating a reduced bill or setting up a payment plan with your provider. You could try removing nonessential items from your budget so you can pay off your bills. A credit card is another option, as is taking out a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How to check for medical billing errors?

It can be hard to understand medical bills and identify billing errors. One tactic to check for medical billing errors is to have your healthcare provider’s billing department walk you through exactly what you are being charged for and why.

Can I sue for incorrect medical billing?

It can be wise to first address discrepancies with the health care provider’s office. If you don’t reach an agreement about correcting an issue, know that the False Claims Act (FCA) can provide legal recourse to combat fraudulent medical billing.

What do I do if I think a medical bill is wrong?

You can address perceived errors on a medical bill with the provider and/or with your insurer. If the insurer doesn’t resolve the situation to your satisfaction, you might need to file an appeal or consult legal counsel.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q325-021

If you have unmanageable credit card debt, you might consider credit card debt settlement, a process where you negotiate with your credit card company or a debt collector to pay off less than the total amount owed. The creditor agrees to forgive a portion of the debt in exchange for a lump-sum payment or a payment plan.

This guide provides more information about negotiating a credit card debt settlement.

The Difference Between Secured and Unsecured Debt

First, take a closer look at the type of debt a credit card typically is. When a credit card company issues a credit card, it’s offering you credit. It’s taking a chance on getting its money back, plus interest. It’s more than likely that the credit card you have is considered unsecured.

Unsecured debt isn’t connected to any of your assets that a credit card company can seize in the event that you default on your payments. Essentially, the credit card company is taking your word for it that you are going to come through with the monthly payments.

Secured debt works a bit differently. They’re backed by an asset, like your car or home. If you default on a secured debt, your lender could seize the asset and sell it to pay off your debt. Mortgages and auto loans are two common types of secured debt.

Credit Card Debt Negotiation Steps

The process of negotiating credit card debt usually begins when you have multiple late or skipped payments — not just one. A good first step is to find out exactly how much you owe, and then research the different options that may be available to you. Examples include a payment plan, an increase in loan terms or lowered interest rates.

Once you have that information, you’re ready to negotiate. You can start by calling your credit card company and asking for the debt settlement department. Or, you can send a note by email or regular mail.

You may have to go through a number of customer service reps and managers before striking a deal, but taking the initiative can show creditors that you are handling the situation honestly and doing what you need to do.

When you do reach an agreement, be sure to get the agreed-upon terms in writing.

Types of Credit Card Debt Settlements

Here are some options when it comes to credit card debt settlement.

Lump Sum Settlement

This type of agreement is perhaps the most obvious option. Essentially, it involves paying cash and instantly getting out of credit card debt. With a lump sum settlement, you pay an agreed-upon amount, and then get forgiveness for the rest of the debt you owe.

There is no guarantee as to what lump sum the credit card company might go for, but being open and upfront about your situation could help your cause.

Workout Agreement

This type of debt settlement offers a degree of flexibility. You may be able negotiate a lower interest rate or waive interest for a certain period of time. Or, you can talk to your credit card issuer about reducing your minimum payment or waiving late fees.

Hardship Agreement

Also known as a forbearance program, this type of agreement could be a good option to pursue if your financial issues are temporary, such as the loss of a job.

Different options are usually offered in a hardship agreement. Examples include lowering interest rate, removing late fees, reducing minimum payment, or even skipping a few payments.

Why a Credit Card Settlement May Not Be Your Best Option

Watching your credit card balance grow each month can be scary. Depending on your circumstances, a settlement may be the best solution for you.

However, it’s not without its drawbacks. For starters, a settlement may result in your credit card privileges being cut off and your account frozen until a settlement agreement is reached between you and the credit card company.

Your credit score could take a hit, too. This is because your debt obligations are reported to the credit bureaus on a monthly basis. If you aren’t making your payments in full, this will be noted by the credit bureaus.

That said, by negotiating a credit card settlement, you may be able to avoid bankruptcy and give the credit card company a chance to recoup some of its losses. This could stand in your favor when it comes to rebuilding your credit and getting solvent again.

Recommended: Personal Loan Interest Rates

Solutions Beyond Credit Card Debt Settlements

Personal Loan

Consolidating all of your high-interest credit cards into one low-interest unsecured personal loan with a fixed monthly payment can help you get on a path to pay off the credit card debt. Keep in mind that getting this kind of loan, often called a credit card consolidation loan, still means managing monthly debt payments. It requires the borrower to diligently pay off the loan without missing payments on a set schedule, with a firm end date.

For this reason, a personal loan is known as closed-end credit. A credit card, on the other hand, is considered open-end credit, because it allows you to continue to charge debt (up to the credit limit) on a rolling basis, with no payoff date to work towards.

Recommended: Guide to Unsecured Personal Loans

Transferring Balances

Essentially, a balance transfer is paying one credit card off with another. Most credit cards won’t let you use another card to make your payments, especially if it’s from the same lender. If your credit is in good shape, you can apply for a balance transfer credit card to pay down debt without high interest charges.

Many balance transfer credit cards offer an introductory 0% APR, but keep in mind that a sweet deal like that usually only lasts about six to 18 months. After that introductory rate expires, the interest rate can jump back to a scary level — and other terms, conditions, and balance transfer fees may also apply.

Credit Consumer Counseling Services

Credit consumer counseling services often take a more holistic approach to debt management. You’ll work with a trained credit counselor to develop a plan to manage your debt. Typically, the counselor doesn’t negotiate a reduction in debts owed. However, they may be able to have your loan terms extended or interest rates lowered, which would lower your monthly payments. (Note that extending a loan term typically results in more interest paid over the life of the loan.)

A credit counselor can also help you create a budget, offer guidance on your money and debts, provide workshops or educational materials, and more.

Many credit counseling agencies are nonprofit and offer counseling services for free or at a low cost. You can search this list of nonprofit agencies that have been certified by the Justice Department.

The Takeaway

When credit card debt starts to become unmanageable, negotiating a credit card debt settlement may be an option to consider. There are different types of settlement options to consider. Understanding what’s available to you — and what makes sense for your financial situation and needs — can help you make an informed decision. If a settlement isn’t right for you, there are other solutions, such as a personal loan or credit counseling services, that may be a better fit.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What percentage of debt will credit card companies settle for?

Credit card companies may settle for repayment of a reduced amount of the total debt, often between 20% and 80% of the outstanding balance. The exact percentage varies based on factors like the age and amount of the debt and the account holder’s ability to demonstrate financial hardship.

Can I negotiate a credit card settlement?

To negotiate credit card debt settlement yourself, decide what you can afford to pay and offer to settle with the creditor in a lump sum or installment plan. The creditor is not obligated to negotiate, but you may be successful.

Will creditors accept a 50% settlement?

Some creditors may accept 50% of the amount owed as part of a debt settlement. Others may want 75%–80% of what you owe. It can make sense to start low with your first offer and negotiate from there.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q325-025

If you’re having trouble paying your student loans, you’re not alone. More than 42.7 million borrowers have federal student loan debt.

In fact, 20% of all American adults with undergraduate degrees have outstanding student debt and 24% of postgraduate degree holders report outstanding student loans, according to the Education Data Initiative. Almost 8%% of students use student loans from a private source, such as a bank or a credit union. The average federal student loan debt balance is $38,375, while the total average balance (including private loan debt) may be as high as $41,618.

If you’re among these borrowers, you may find it challenging to afford the payments on your loans—especially if you have other debt and financial obligations. Student loan debt is now the second-highest consumer debt category after mortgages.

If you are delinquent on your student loan for a certain period of time, your loan will go into what’s called default. The consequences to student loan default can be serious–and if the student loan in question is private (rather than federal) there are particular factors to be aware of. Read on to learn what can happen if you don’t pay your private student loans, what your options are, and how best to avoid a default happening in the first place.

What Happens If You Don’t Pay Your Private Student Loans?

Each private student loan lender will likely be a little different, but generally, missing a student loan payment can put your loan into delinquency, and may incur late fees and/or penalties.

In addition, depending on the loan, interest can accrue on those penalties and on the unpaid principal loan amount, which then can get added to how much you owe. If you miss too many consecutive payments, you may be at risk of defaulting on the loan.

Each private lender has their own terms that trigger student loan default. That typically means multiple missed payments. Even if you declare bankruptcy, it’s unlikely your student loan debt goes away. It’s important to check the terms of your private student loans, since they vary by lender.

Once a student loan goes into delinquency or default, it will likely affect your credit score. That can possibly affect your ability to take out loans in the future or achieve other financial goals, like buying a house.

In addition, once a private student loan goes into default, the lender can send it to collections. If you can’t pay your private student loans, you could ultimately face a judgment that could result in a garnishment of your wages.

Ideally, if your student loan payments are too high, you might consider other options before risking delinquency or default.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

What If You Can’t Pay Your Federal Student Loans?

The penalties and provisions attached to federal student loans are quite different from those for private student loans. If you have both federal and private loans it’s important to consider them separately when coming up with a plan to grapple with default.

Federal loans often come with more protections and options for repayment plans. One option is to pursue an income-driven repayment plan (IDR), which allows for more manageable payments based on your income and family size. Generally, your payment amount under an income-driven repayment plan is a percentage of your discretionary income. The percentage is different depending on the plan.

You might also be eligible for deferment or forbearance for your federal loans, if you qualify, which can temporarily pause your student loan payments.

Even though federal student loans (both subsidized and unsubsidized) are government-backed and originated by the U.S. Department of Education, they’re administered by a student loan servicer, which is a private company in charge of the loan. While this means you might be making your payments to a private loan company, it’s still a federal student loan and it comes with federal student loan protections.

Options If You Can’t Pay Your Private Student Loans

If your private student loan repayment seems too high, however, the options are different. You can’t apply for an IDR plan for a private student loan, for example. Every private loan lender sets its own terms and conditions. Getting private student loan help varies with each lender.

While there are fewer options if you can’t make your private student loan payments, there are still some actions you can consider.

1. Talking to Your Lender

If your private student loan payments are too high, then it might be worth talking to your lender. You could start by getting a copy of your promissory note so that you know all the terms and conditions of your specific loan.

Each private lender sets out its own repayment and deferment options, so your loan may differ from your friends’ loans.

Lenders, however, want to get paid, and it’s not in their interest for you to default. Once you have the terms of your loan in hand, then you can try talking to your private lender about potential alternative student loan repayment plans to see if they’ll work with you on what you can afford or even if you might be able to put your loan payments on hold if you need to.

2. Exploring Deferment and Forbearance Options

In certain circumstances, as mentioned above, deferment and forbearance are available to temporarily put payments for federal loans on hold. However, for private student loans, the forbearance and deferment options will be determined by your lender.

Private lenders may offer forbearance and/or deferment in certain circumstances, such as returning to grad school or entering active military duty. If you can’t pay your private student loans, then you may want to see if your lender offers these options.

It’s important to know, though, that in most cases, interest continues to accrue and compound during forbearance or deferment on private student loans. That means the interest on the amount you owe builds up and gets added to the loan principal (which then accrues its own interest), and could end up costing you more in the long run.

3. Making a Student Loan Repayment Budget

This may sound obvious, but it can be important to create a plan and budget for repaying your student loans. Cutting back on some expenses or looking for additional income to allocate towards student loan payments could pay off in the long run.

Because student loan interest accrues and compounds over time, every little bit paid off now can save more money later.

In addition, if a borrower makes as many payments as possible on time, it could save late fees or additional penalties.

There are a few principles for how to tackle student loan payment.

You could start with the loans that have the smallest balances and build momentum, a strategy known as the snowball method, or start with the highest interest loans to save yourself the most money (the avalanche method).

You can also benefit from prepaying more than the minimum monthly payment. If you allocate additional payment towards your loan principal, then you won’t accrue interest on that principal you paid down, and you could save yourself money.

4. Refinancing your Student Loans

If your private student loan payments are too high, one way to potentially lower your monthly payments could be to refinance your student loans by extending your term.

If you need lower monthly payments right away, extending your loan term is one way to accomplish this. (You may pay more interest over the life of the loan if you refinance with an extended term, however.)

Once you’re on more solid financial footing, refinancing could qualify you for a lower interest rate, which could save you money in the long run (since interest adds up and compounds over time).

Recommended: How to Pay Off Student Loans

5. Declaring Bankruptcy

It is possible to declare bankruptcy when the majority of your debt is made up of student loans. However, the legal bar for having your student debt discharged is high.

You may have your federal student loan discharged in bankruptcy only if you file a separate action, known as an “adversary proceeding,” requesting the bankruptcy court find that repayment would impose undue hardship on you and your dependents in the future.

Private student loans can also be discharged in bankruptcy. Note that private student loans are exempt from bankruptcy discharge (similar to taxes and child support) without a separate application. In that application, you would have to prove in court that you are unable to pay the loan and make a case that it will be extremely difficult to do so in the foreseeable future.

However, if you can make a case for it financially, the court may rule to discharge the loan. “Some private loans for educational purposes can be discharged in a normal bankruptcy proceeding, just like most other consumer debts,” according to the Consumer Financial Protection Bureau.

It’s important to take into consideration the serious impact a bankruptcy will have on your credit rating and ability to borrow money in the future.

Recommended: Bankruptcy and Student Loans, Explained

Lowering Your Student Loan Payments

If you’re struggling to make your payments and need private student loan help, then refinancing your private student loans, ideally with a lower interest rate or more favorable loan terms could lower your monthly payments. Just be aware that refinancing federal student loans makes them ineligible for federal benefits like income-driven repayment plans and deferment.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

What happens if you can’t pay back a private student loan?

Each lender handles this issue differently, but in general, if you can’t pay back a private student loan, your loan first goes into delinquency, and you may be charged penalties and/or late fees. Typically, after a number of missed payments, the loan goes into default, which can damage your credit score and make it more difficult to get credit or loans, including a mortgage. The lender can also send your loan to collections. If you still can’t pay it, they might pursue a judgment to try to garnish your wages.

To avoid delinquency or default, reach out to your lender immediately if you’re having trouble repaying your loan to find out what your options are.

How can I get rid of student loan debt legally?

To get rid of student loan debt legally, you have a few options. If you have federal student loans, you could opt for an income-driven repayment plan, which bases your monthly loan payments on your discretionary income and family size and typically results in a lower monthly payment. If you choose the income-based repayment (IBR) plan, your remaining loan balance may be forgiven after you make a certain number of payments over 20 or 25 years.

If you have private student loans, you can talk to your lender to see if they might be willing to negotiate a settlement or offer you deferment or forbearance. Or you could consider refinancing your loans to lower your monthly payments, if you qualify. You could also declare bankruptcy, but the process is challenging and it will have a serious impact on your credit and ability to borrow money in the future.

What do I do if I cannot afford my student loans?

If you cannot afford your student loans, there are ways to potentially lower your monthly payments to make them more manageable, such as switching to an income-driven repayment plan if you have federal loans, or applying for federal deferment or forbearance.

For private loans, you can reach out to your lender to see if they might be willing to offer you a repayment plan with a lower monthly payment. You could also examine your budget and look for expenses to eliminate and reduce, and then put the money you save toward your loan payments. You might also consider student loan refinancing to see if you qualify for a lower interest rate or more favorable loan terms that could lower your payments.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.