If you are suddenly hit by unexpected medical expenses, the answer may be to consolidate bills. Many people are paying far too much of their income every month on credit debt. If they consolidate bills, they can either free up some of their income to meet ongoing monthly medical expenses or they can increase their borrowing to cover major hospital and other costs while keeping their repayments the same.

There are a number of ways you can consolidate bills. If you are a homeowner, a home equity loan is probably the least expensive way to reduce your monthly credit payments. However, there is always a risk in tying your home to any debt. If you cannot meet the repayments of the second loan you can lose your home. Chances are, though, that even if the payments decrease or remain the same, you will maintain your current status quo.

However, if the medical expenses are likely to be staggered, a homeowner may well be advised to choose a home equity line of credit to consolidate bills. The advantage of this loan is that the loan isn't paid out in one payment, whether you need it or not. It is conducted much like a checking account. You only access the account when you need to make a payment. This way, interest is not charged on money that is just sitting in your account. You only begin to pay interest once you withdraw the money.

A personal loan is probably the most common way to consolidate bills. Personal loan interest rates are usually lower than credit card interest rates and so the monthly payments are usually lower. The advantage of using a personal loan to consolidate bills is that there is a definite loan term that means at the end of that term, you will have paid off the original debt. However, they may not be flexible enough to meet your needs in the face of a medical emergency.

An often overlooked strategy to consolidate debt is to transfer all balances to a low rate credit card. Generally speaking, people consolidate bills to get out of credit card debt, not replace it. However, low rate credit cards can reduce monthly payments and provide flexibility in terms of credit limit to cover ongoing medical expenses. It is important to read the terms and conditions very carefully when agreeing to a credit card. Be aware of penalties for late payments and possible interest rate increases. The risk of choosing this method to consolidate debt is that you can easily increase your credit card debt, leaving you in a worse situation than before.

So if you are suddenly confronted by unexpected medical bills and are tearing your hair out in worry, take a step back. You may be able to consolidate bills and give yourself much needed breathing space. If you consolidate debt, you will be able to free up income or increase borrowing power to get you through difficult times.