Dental loans are exactly what they sound like — loans that are used specifically to finance dental procedures. Dental costs can run steep if your insurance won’t cover some or all of the procedures. This is where dental financing can be a lifesaver.
A dental loan is really just a personal loan that you can use to pay for dental work. It’s an unsecured loan, meaning there’s no collateral tied to the loan. Because the lender assumes more risk, you can expect interest rates to run higher when compared with a secured loan.
Once approved for a dental loan, you’ll receive a lump sum. Some lenders can fund your loan the same day you’re approved. You can use this money to cover dental costs, then make a fixed monthly payment until the loan is paid off.
Even with dental care insurance, you still may be on the hook for some portion of the total cost, especially if you’re enrolled in a high-deductible plan. Remember: You have to meet your deductible before your coverage kicks in.
Dental loans can be used for any number of procedures. Here’s a rundown of the most common ones, and their costs.
1. Check your credit scoreA higher credit score generally translates to a lower APR on your loan. A score that’s under 640 will make it difficult to qualify for a competitive APR, if you qualify for a personal loan at all. You can check your credit score for free using LendingTree.
Getting dental loans for bad credit isn’t necessarily out of the question. Talk with lenders to see if other factors — like your income, employment and a bank account in good standing — could sway the decision in your favor. You can also consider taking out a secured loan or enlisting the help of a cosigner.
2. Get prequalifiedOnce you know your credit score, the next step is to check your estimated APR. Prequalification lets you see potential loan terms with a soft credit pull, which won’t affect your credit score. To get prequalified, you’ll send the lender some basic information, such as your annual income, desired loan amount and loan purpose.
To assist your search, use LendingTree’s personal loan marketplace. Keep in mind that approval isn’t guaranteed.
3. Shop around and compare lendersGetting prequalified through several lenders will help you find the best possible loan for your unique financial situation. Compare each lender based on:
APR: Your APR is an accurate measure of your cost of borrowing. The lower your APR, the less the loan will cost you in interest and fees.
Loan amount: Be mindful to borrow only what you need and can reliably repay.
Loan length: A shorter term means higher monthly payments but lower overall interest charges.
4. Gather necessary documentsOnce you’ve decided on the best dental loan for you, gather up the necessary documents for your formal application, including proof of income, such as recent pay stubs, as well as bank statements from the past few months.
5. Apply and get fundingWhen you’re ready to formally apply with a lender, you’ll submit to a hard credit check, which will affect your credit. With your documentation and credit information, the lender will assess your eligibility for a loan.
You should have a decision rather quickly, with some lenders approving applications within hours. If approved, you could have your funds within a few business days. With your funds in hand, you can begin planning for your dental procedure.
Consider in-house dental financing: Many dentists set their own interest rates and may be willing to negotiate in-house financing plans with patients. Ask if you can set up monthly payments directly to your dentist and avoid loans and finance charges altogether. In some cases, this may be a more affordable option than a personal loan.
Ask for a cash discount: Your dental care costs may be negotiable. For example, you might be able to score a discount if you dip into savings to pay a portion of your procedure with cash.
Get a second opinion: If you’re considering costly dental work, be sure to weigh all your options so that you’re only getting the procedures you truly need. A good dentist is one who has your best interests at heart.
Use your FSA benefits: A flexible spending account is an employer-sponsored savings account that lets you use pretax dollars to pay for medical or dental expenses. They’re typically funded with automatic payroll deductions. Just keep in mind that it’s a use-it-or-lose-it account, meaning that money in an FSA does not carry over from year to year.
Open an HSA: A health savings account is similar to an FSA with some key distinctions. You have to be enrolled in a high-deductible health care plan to qualify, but any money you don’t use at the end of the calendar year rolls over into the next year.