Dental Loans: How to Finance Dental Costs

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Dental work can be expensive, but putting it off can cost you more in the long run. If you’re facing a major dental procedure but are strapped for cash, consider taking out a dental loan. This is typically a personal loan used specifically to cover expenses related to dental care.

This financing option typically has a lower average interest rate than a credit card — 12.64 percent versus 20.13 percent, respectively. However, it may be worth it to explore alternatives to avoid any damage to your credit. If you end up needing a loan, get quotes from multiple lenders to ensure you get the most cost-effective plan for your dental work.

What is a dental loan?

A dental loan is a type of installment loan used to pay for dental expenses. Like other personal loans, they have predictable monthly payments and fixed interest rates. They’re also usually unsecured, meaning you won’t have to pledge any collateral (like a car or home).

You can apply for dental loans through a bank, credit union, online lender or marketplace like Bankrate. If you have strong credit and a high income, you may qualify for the lowest rates, which start below 7 percent. However, bad credit personal loan rates may be as high as 35.99 percent.

How much do common dental procedures cost?

What you’ll pay out of pocket for a dental procedure depends on your insurance coverage — if you have it. Here’s what to expect for common dental procedures, according to Care Credit, but remember that your costs may vary.

Compare dental loans

To get the best rates on a dental loan, you should get quotes from at least three lenders. Try to choose lenders that allow for prequalification to avoid unnecessary damage to your credit score. You can get prequalified with several lenders at once with Bankrate by entering basic personal and financial information.

Here’s a look at the rates and terms offered by a few popular lenders:

How to get a dental loan

Applying for a personal loan to cover dental expenses involves comparing your options to get the best deal, gathering the necessary documents and then submitting a formal application once you’ve found a lender that best matches your borrowing needs.

1. Research lenders and prequalify. Research lenders and compare personal loan rates and terms. Prequalifying will give you an estimate of your loan amount and interest rate.
2. Formally apply with a lender. After you choose a lender, the next step is to fill out a loan application online or in person. You’ll need to know the amount you need to borrow and choose your desired loan term.
3. Wait for approval. Once you’ve applied, the lender will review your application and decide whether to lend you money. Although approval times vary, you can sometimes be approved — and funded — the same business day you apply.
4. Review and sign your loan agreement. If you’re approved, a lender will send you a loan agreement. Review the document carefully before you sign it. Afterward, the lender will issue your funds, usually as an ACH transfer directly to your bank account.

• How to compare dental loans
  

  Consider a lender’s eligibility requirements, terms and available amounts when comparing dental loans.

  • Eligibility requirements:Minimum credit score and income requirements vary based on the lender. Before you apply, review a lender’s eligibility requirements. If the lender doesn’t publish its requirements, ask if prequalifying is an option.
  • Loan amounts: Some lenders require that you borrow a certain amount of money. Because minimum loan amounts vary, choose a lender that offers the amount you need to cover your dental expenses.
  • Loan terms: Personal loans typically have repayment terms of one to eight years. Although a long term can result in a low monthly payment, you’ll also pay more interest over the life of the loan, increasing your total cost of borrowing. You’ll typically get the lowest APR offers for the shortest terms (three years or less).
  • Fees: Some lenders charge origination fees, late fees, returned payment fees and application fees. These fees can significantly increase your borrowing costs or reduce your loan amount, since they are deducted from the amount you receive.
  • Annual percentage rate (APR): A loan’s APR tells you how much interest you’ll pay over the life of the loan; it’s a better measurement than the interest rate because it also accounts for any loan fees.

Dental loan alternatives

When determining how to pay for dental work, it makes sense to see how you can lower or mitigate the cost before resorting to financing.

• Get a second (or third) opinion
  

  Not all dental offices have the same prices for the same procedures, so shop around and find a reputable dentist you trust who can do the work for a lower price. You can also try to negotiate with your dentist, though there’s no guarantee they will do your work for a reduced rate. It never hurts to ask, though.

• In-house financing
  

  Some dental offices offer special rates depending on your circumstances, so inquire with your dental office whether they offer in-house financing for expensive procedures. These installment loans often come with no or low interest rates, which can save you a lot of money.

• Medical credit cards
  

  Another way to save on interest is by applying for a medical credit card — this product is designed to cover medical and dental expenses. In some cases, medical providers may even offer special financing terms, like 0 percent APR. CareCredit is a popular medical credit card that offers short-term financing with no interest charges if the balance is paid within 24 months.

• Dental schools
  

  Many dental schools will offer dental care to the public at a reduced rate, but it can take a while to get in, as most of these schools have high demand for their dental work. Check to see if a dental school near you offers these services.

• Credit cards
  

  If your income is unpredictable, or you can’t afford the monthly payments offered by personal loan lenders, using a credit card may be worth considering. You’ll have the flexibility to make minimum payments if you have a low earnings month. But remember: Since credit cards are revolving debt, your credit utilization ratio will increase, which can have a negative effect on your credit score.

  Bankrate’s Casey McNulty chose a credit card to pay for nearly $5,000 worth of dental work to earn points on her American Express gold card. “I didn’t consider any other financing options because I knew I could pay the total in full, especially when spread out over three months, and I wanted those credit card points.”  She added that although the dentist also offered to spread the charge out over three months, using the credit card was a good way for her to earn points to put toward other goals.

• Savings
  

  It will take longer to get treatment, but if the dental procedure you need is elective or can be put off for a while, it may be wise to save for the treatment instead of financing it. Saving the money to pay upfront will keep you from paying interest on a loan or credit card.

Bottom line

Dental work can be pricey. A personal loan is one solution to get the funding you need, but before applying, consider alternative financing options, such as in-house financing and a 0 percent APR medical credit card. And don’t underestimate the importance of getting quotes from multiple dental providers to confirm that you’re getting a fair price.

If you decide that a personal loan is your best option for dental costs, compare multiple lenders. Review their interest rates, loan amounts, loan terms and all associated fees before choosing your lender.