As a medical professional, you have most likely experienced debt in some form. Student loans are almost inevitable when it comes to medical, dental, PA, NP, or veterinary school, and learning how to manage student loans can be difficult for some. When you add mortgages, car loans, credit cards, business loans, and other personal debt, managing it becomes even more difficult.
Maybe you have high interest rates that you would like to bring down. Maybe it’s getting too complicated to juggle all your monthly payments, and as a result, your payments are late or worse you are missing payments. Quite possibly this type of financial responsibility may be taking a toll on your mental health, and you realize that you need to do something about it.
Whatever your reasoning is, debt consolidation benefits your growing business as well as in your personal life.
How Does Debt Consolidation Work?
Debt consolidation allows you to have one single payment rather than multiple. Here are a few ways you can go about consolidating debt:
- Get a personal loan
- Transfer credit card balances to one card
- Get a home equity loan
- Take a loan from your 401(k)
- Get a commercial loan
Debt Consolidation Benefits
Consolidating your debt can help you in your personal life and your medical practice. Here are six debt consolidation benefits:
- Lower Interest Rates
If you have a good credit score, when you consolidate your debt, you can get lower your interest rate than credit cards and pay less in the long run. This can have a positive effect on your practice – rather than paying high interest rates on multiple loans and credit cards, consolidating your debt you will see an increase in available cash each month and you can put that money into other areas of your business.
2. Improve Your Credit Score
Credit scores are used for many different things – primarily your credit score is a factor when you are borrowing money or making a large financial commitment. Whether you’re trying to buy a house, car, or even a medical practice, your credit score will influence the interest rate you are offered, how much you can qualify for, and whether you can get the loan. Improving your credit score is a good move regardless of where you are in your life. As your credit score increases, it can create opportunities for you to finance medical equipment, buy equity in practices, or make other necessary investments for your business at a low interest rate.
3. Simplified Payments (Improved Cash Flow)
Making multiple monthly payments can be a hassle, especially if your payments are due on different dates with different amounts. When you consolidate your debt, monthly payments are consolidated into one monthly payment that typically has a better interest rate and is easier to remember. Paying the required minimum payment can stress your monthly cashflow, debt consolidation done well can improve the amount of cash available each month for other personal or business related activities.
4. Turn Your Attention Other Areas of your Business
Your debt shouldn’t be at the forefront of your mind, but it’s difficult to push it aside when you have a different payment coming up every few days. A debt consolidation loan streamlines the payment process so you can focus on other things. Caring for patients, updating equipment, and hiring additional staff members are just a few examples of business matters that deserve your time and attention.
5. Have a Better Grasp on Your Finances
Finances can be a touchy subject – any business owner or accountant should know how much time, attention, and detail goes into making sure your finances are as close to perfect as possible. When you have multiple payments due every month, it complicates things, and you run the risk of missing one or two – which can cause late fees and damage to your credit score. Having one payment will help you keep better track of your finances so you won’t have to pay another late fee or worry about your credit score dropping.
6. Improve Your Mental Health
You might think that your debt isn’t affecting your mental health, but if you’re thinking about it regularly, chances are you’re somewhat stressed about it. Constant stress can lead to health problems down the road, and having good mental health is vital when you interact with family, friends, patients, and co-workers every day. Although one larger monthly payment can seem daunting, you’ll quickly start to see the amount decrease since the interest rates will be lower. And as that number lowers, so will your stress
Is Debt Consolidation Right For You?
Will debt consolidation make your debt disappear? No. Nevertheless, debt consolidation will allow you to spend less time thinking about it and spend more time focusing on what really matters, all while saving money and time paying it off.
If you’re ready to take this step in improving your life and your practice, Hippo Lending is here to help. Start the application and approval process today, and please don’t hesitate to reach out if you have any questions or concerns.
Hippo Lending represents the convergence of medicine and finance. While we may not be saving lives, the underlying principles of the Hippocratic Oath closely align with our values: a commitment to service and treating our customers as people, not just a loan. We ensure privacy and always act from a position of unity and humility.