Dental loans: how to finance dental costs

Dental work can be expensive, but having it done can save you money in the long run. If you’re strapped for cash, consider taking out a dental loan: a personal loan used to cover all dental costs. This financing option usually has a lower average interest rate than a credit card.

However, before taking out a dental loan, weigh the pros against the cons to see if it is a good idea based on your financial circumstances. If not, you should explore alternative financing options.

What is a dental loan?

A dental loan is just another name for a personal loan used to pay for dental costs. Like other personal loans, they typically come with fixed monthly payments and interest rates. Additionally, they are usually unsecured loans, meaning you don’t have to pledge collateral like you would with a car loan.

You can apply for dental loans through a bank, credit union, or online lender. Loan terms and interest rates vary based on your creditworthiness. If you’re not sure whether you want to use a personal loan in this way, it may be worth reading through a guide to medical loans to see why this path makes sense for so many people.

How to get a dental loan

If you want to take out a dental loan, you can do so in four easy steps.

1. Research lenders and prequalify

Research as many lenders as possible to compare personal loan rates and terms. If you meet a lender’s eligibility requirements, prequalification will provide you with an estimate of your loan amount and interest rate.

2. Formally apply to a lender

After you choose which lender offers a dental loan that meets your needs, the next step is to complete a loan application online or in person.

In this phase of the process you determine the exact amount you want to borrow and choose the desired loan term.

3. Wait for approval

After you have submitted an application, the lender will assess your application and decide whether it wants to lend you money. Although approval times vary, sometimes you can be approved the same business day.

4. Review and sign a loan agreement.

If you are approved, a lender will send you a loan agreement. Check the document carefully before signing it. Then the lender will issue your money. Although funding times vary, some lenders will deposit your money into your bank account the same business day.

How to Compare Dental Loans

When comparing your dental loan options, there are some factors to consider:

• Eligibility requirements: Minimum credit score and income requirements vary depending on the lender. Before applying, review a lender’s eligibility requirements. If the lender does not publish its requirements, ask if prequalification is an option.
• Loan Amounts: Some lenders require you to borrow a certain amount. Because minimum amounts vary, choose a lender that offers the amount you need to borrow to cover your dental costs.
• Loan terms: The term varies per lender. Although choosing a longer term can lower your monthly payments, it can also increase the interest you pay over the life of the loan.
• Fees: Some lenders charge origination fees, late payment fees, returned payment fees, and application fees. These fees can significantly increase your borrowing costs or reduce your loan amount. Additionally, some charge prepayment fees, which penalizes you if you pay off your loan early.
• Annual Percentage Rate (APR): The APR on a loan tells you how much interest you will pay over the life of the loan; it is a better measurement than the interest rate because it also takes into account any borrowing costs.

How to Apply for a Dental Loan

Here is a step-by-step guide to applying for dental financing:

• Step 1: Visit the lender’s website and complete the online application. (You may also be able to submit a paper application).
• Step 2: Complete the application completely. Most lenders will ask you to provide personal and financial information, such as your name, Social Security number, employer and income.
• Step 3: Provide the requested documentation, usually proof of income. The lender also checks your credit to determine whether you are suitable for a loan.
• Step 4: Review and accept the loan agreement after approval. The lender then takes out the loan and pays you the money.

Dental financing with bad credit

Financing can be difficult to obtain if you have less than excellent credit, but with a little work it may be possible to find a lender who will offer you financing. Here are three steps to increase your chances of finding dental financing with bad credit.

Check your credit reports

Your credit reports may contain errors that lower your credit score, so it’s a good idea to review them at least once a year. You can view every credit report from all three major credit bureaus, Experian, Equifax and Transunion, every week by visiting AnnualCreditReport.com.
As you review your reports, look for discrepancies or incorrect delinquent or defaulted accounts. If you find errors on your credit report, dispute them with any credit bureau that lists them on your report or with the creditor who reported the information. If the error is removed, it could increase your credit score.

Take steps to improve your credit score

If the dental work is not urgent, you can spend some time and effort improving your credit score before taking out a dental loan. Make sure you pay all your bills on time and, if possible, pay off your current debts. A higher credit score can increase your chances of getting a better rate, lowering your borrowing costs.

Shop around for the right lender

It can be frustrating to find a dental loan if you have bad credit, but there are options if you know where to look. Some lenders such as LendingClub and Avant are willing to work with borrowers with poor credit, although your interest rates may be higher.

Alternatives to a dental loan

When determining how to pay for dental work, it is wise to look at how you can reduce or limit costs before financing.

Internal financing

Some dental practices may offer special rates depending on your circumstances. So check with your dental practice to see if they offer in-house financing for expensive procedures. These installment loans often have no or low interest, so you can save a lot of money.

Medical credit cards

Another way to save on interest is to apply for a medical credit card. Medical credit cards cover medical and dental costs, and in many cases, medical providers even offer special financing terms for a while, such as 0 percent interest. To learn more about medical credit cards, read about covering medical expenses with credit cards.

Dental schools

Many dental schools offer dental care to the public at a discounted rate, but it may take a while to gain access as most of these schools have a high demand for their dental work. Check to see if a dental school near you offers these services.

Save for the procedure

It will take longer to get treatment, but if the dental procedure you need is elective or can be postponed for a while, it may be wise to save for the treatment rather than finance it. Saving the money to pay upfront will help you avoid paying interest on a loan or credit card.

Shop

Not all dental offices have the same prices for the same procedures, so shop around and find a reputable dentist that you trust and who can do the work for a lower price. You can also try to negotiate with your dentist, but there is no guarantee that they will do your work at a discounted rate. However, it never hurts to ask.

it comes down to

Dental work can be tricky, especially if you don’t have the cash to pay for it. A personal loan is a solution to get the financing you need. But before you apply for one, consider alternative financing options, such as in-house financing and medical credit cards with 0 percent APR. Also consider taking the steps mentioned above to reduce your dental costs.

If you think covering dental costs with a personal loan is the right choice, compare rates and terms from multiple lenders to get the best deal.