Dental loans: How to finance dental costs

Dental work can be expensive, but getting 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 expenses. This financing option can provide quick access to cash and typically 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’s a good idea based on your financial circumstances. If it’s 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 expenses. Like other personal loans, they typically come with fixed monthly payments and interest rates. In addition, they are usually unsecured loans, meaning they don’t require you to pledge any collateral, like an auto 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 are unsure about using a personal loan this way, it may be worth looking over 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 five easy steps:

1. Prequalify for loan: To compare personal loan rates and terms, prequalify with as many lenders as possible. If you meet a lender’s eligibility requirements,  it will provide you with an estimate of what your loan amount and interest rate might be.
2. Formally apply with a lender: After you choose which lender offers a loan that meets your needs, the next step is to fill out a loan application online or in person. Most lenders will ask you to provide personal and financial information such as your name, Social Security number (SSN), employer and income.
3. Choose loan term and amount: Enter the amount you want to borrow on the application and choose your desired loan term.
4. Wait for approval: Once you have applied, the lender will review your application and decide whether to lend you money. Although approval times vary, you can sometimes be approved the same business day.
5. Review and sign 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. Although funding time varies, some lenders will deposit your funds into your bank account the same business day.

How to compare dental loans

When comparing your dental loan options, here are some factors to keep in mind:

• 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 amounts vary, choose a lender that offers the amount you need to borrow to cover your dental expenses.
• Loan terms: Term lengths vary by lender. Although choosing a longer term length can lower your monthly payments, it can also increase the amount of interest you pay over the life of the loan.
• Fees: Some lenders charge origination fees, late fees, returned payment fees and application fees. These fees can greatly increase your cost of borrowing or reduce your loan amount. In addition, some charge prepayment fees, which penalize you for paying your loan off early.
• 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.

Alternatives to a dental loan

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.

In-house financing

Some dental offices may offer special rates depending on your circumstances, so inquire with your dental office as to 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. Medical credit cards cover medical and dental expenses, and in many cases, medical providers will even offer special financing terms, like 0% interest for some time. To learn more about medical credit cards, read information about covering medical expenses with credit cards.

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.

Save for the procedure

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.

Shop around

Not all dental offices have the same prices for the same procedures, so shop around and find a reputable dentist you trust that 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.

Dental financing with bad credit

Financing can be difficult to obtain when you have less-than-stellar credit, but with a little work, finding a lender that will offer you financing may be possible. Here are three steps you can take to improve your chances of finding dental financing with bad credit.

Review your credit reports

Your credit reports can contain errors that lower your credit score, so it’s a good idea to review them at least once a year. Normally, federal law allows you to view your reports once a year from all three major credit bureaus, Experian, Equifax and Transunion, by visiting AnnualCreditReport.com. However, due to Covid-19, you can view each report once a week for free through December 2022.

While checking your reports, look for discrepancies or incorrect past due or defaulted accounts. If you find errors on your credit report, dispute them with each credit bureau that lists it on your report or the creditor that reported the information. If the error is removed, it could increase your credit score.

Take steps to improve your credit

If the dental work isn’t pressing, you can spend some time and effort improving your credit score before shopping for a dental loan. Make sure to pay all your bills on time and pay down your current debt, if possible. A higher credit score can increase your chances of securing a better rate, lowering your borrowing costs.

Shop around for the right lender

Trying to find a dental loan when you have bad credit can be frustrating, but there are options if you know where to look. Some lenders like LendingClub and Avant are willing to work with borrowers with subpar credit, though your interest rates may be higher.

Tips to save on dental work

You may be able to avoid high dental fees by other means:

• Preventative care: Preventative care is the number one way to save on dental work. Take care of your teeth and get regular checkups yearly to catch any potential issues before they compound.
• Discount plans: Some dental offices offer dental discount plans to patients who are lower income or need help, and you may qualify depending on your situation. You might be able to find a health center in your area that provides low-cost or free dental care by using the Health Resources and Service Administrations search tool.
• Dental insurance: You can get dental insurance through your employer, a private insurance carrier or the Health Insurance Marketplace. These plans are significantly cheaper than medical plans and will cover some or all of the costs for the more routine dental procedures.
• Cash discounts: Some dental offices will offer cash discounts if you pay in cash on the day of your procedure. You’ll have to inquire at your specific dentist’s office, but it’s worth asking.
• Dental schools: As mentioned, one of the best ways to save on dental work is to find a dental school that offers dental care to the public. These schools allow the students to perform your dental work while under the supervision of their instructors.

The bottom line

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

If you believe covering your dental expenses with a personal loan is the right move for you, compare rates and terms from multiple lenders to get the best deal.