According to the United States Department of Labor, the cost of dental care is on the rise. Patients who don’t have dental insurance may have to seek loans to cover these costs. In some cases, even insured patients look to loans to make up the difference for procedures not fully covered by their insurance plan.
If you have poor credit, you may run into difficulty finding a loan with terms that are affordable for you. Funding your dental care in these instances can be a challenge, but you should still be able to procure the money to move forward. You just might need to get a bit creative.
If you have bad credit, there are also options aside from standard loans that you can choose from to finance your care. This article will guide you through some available strategies to secure a loan or financing no matter your credit score.
What credit score is needed for dental financing?
The source of your financing is often first determined by your credit score and the requirements set by the lender. For dental financing with a personal loan, a credit score of at least 585 is usually required. The minimum credit score is higher for lenders with lower interest rates or those who don’t charge an origination fee.
If you are looking to finance your dental care with a credit card, you need a credit score of between 640-700. With this, you may be eligible for an account with an introductory APR at 0% interest.
In certain situations, dental financing is still available for people with a credit score below 585. This is often left up to the individual dentist or medical practice. Some providers accept lower credit scores and offer a customized payment system specially designed for them. These costs can vary, as can the rates and interest for each particular plan.
How can I get a dental loan with bad credit?
Having a poor credit history will certainly make it more difficult for you to qualify for dental loans. Though your chances of getting a loan may be slimmer, there are still lenders that will give you financing – you just might need to shop around a bit to find the right fit.
Researching options can be frustrating if you are pressed for time, experiencing pain, or facing a critical procedure. But it is very important to do your homework and explore all of the available options to choose the right loan term or lender for your unique financial situation. Every loan option has accompanying fees, benefits, and requirements.
How to apply for a dental loan
The best way to finance your dental work when you have bad credit is by securing a personal loan.
Personal loans are also known as secured loans because the borrower provides his possessions as collateral. With this arrangement, even people with bad credit can get loans for their dental procedures.
What to watch for with secured loans
The provision of collateral is the major criteria for getting secured personal loans. With this, irrespective of your credit history, your loan request for dental financing will be approved in a generally short amount of time.
Lenders bear less risk with secured loans because they can always take the security if the borrower defaults. This makes it easier to get approved. People with low credit scores should consider this option as no credit history check is required for this type of dental financing.
Generally, 585 is the benchmark credit score accepted by the majority of personal loan providers. However, these lenders may also charge origination fees between 1-8% of the loan amount.
Other loan options
The stiff competition in the lending market makes secured loans a viable option to choose from. Despite your bad credit history, you may still qualify for a loan to cover the cost of emergency or regular dental care.
Alternatives to personal loans for dental care
Personal loans are the most common option when you are looking for dental loans for bad credit. But that does not mean you are restricted to a personal loan. If you do not qualify, are not comfortable with, or cannot afford the terms of a personal loan, there are alternatives. Here are a few to consider.
Negotiate a payment plan with your dentist
If you do not want to secure a dental loan to cover your expenses, consider speaking directly with your dentist. Many dentists are open to offering payment options without asking for a credit history. This can include monthly payments, a longer loan term,
While some dentists and clinics provide in-house offers, others may have relationships with companies specializing in dental financing for people with less-than-perfect credit. Some third-party lenders will offer financing with zero interest and do not check patient credit history.
Use a traditional credit card
Another way to finance dental procedures is by using credit cards. However, it’s very important to note that there are risks involved when you open credit cards for this purpose. Many banks charge high interest rates. If you cannot pay the balance on your account on time, you will likely pay much more than the original cost of dental care.
This option isn’t the best if your credit history is bad or your personal finances do you not afford you much flexibility. Credit cards can cost you a lot in the long term, depending on the APR the bank offers you.
If you are looking for a new credit card to cover the cost of your dental expense, look to open one that can offer 0% interest introductory APR. The key challenge with this method is that good score credit of 700+ and 750+ (excellent credit) may be required.
Eligibility requirements vary widely depending on the lender, but you will need a credit score of at least 600 to qualify for most credit cards. You may not qualify for many traditional or mainstream credit cards if you have a credit score lower than 550.
Apply for a medical credit card
You may also research special credit cards designed to meet specific health needs, such as people who need dental services. CareCredit is one example of a medical card. If you have a fair credit score (640+), you can get special medical financing.
These cards are also quite helpful for individuals looking to cover medical or cosmetic procedures that may not be covered by their existing insurance. They can also be used to help pay for deductible costs associated with insurance coverage.
Going for an unsecured card for bad credit is usually not recommended since their fees and rates are usually expensive.
Look into house financing or a home equity loan
A house with equity on it is undoubtedly an asset you can leverage to qualify for a loan when you have bad credit. Depending on the potential loan amount, you might consider house financing in which you lease your house or use it as collateral to help cover your dental expenses. One option to choose from is a home equity loan or home equity line of credit (HELOC)
The big advantage of this financing option is that it keeps your interest rate relatively low. The catch is you need to put your home as collateral. Remember that defaulting on the loan or being unable to pay it back means the risk of losing your house. You should only consider this option if you’re sure you can pay the loan on time.
Borrow from your 401(k)
You can also consider borrowing from your 401(k). While not often recommended since the intent of a 401(k) is to set money aside for retirement and expenses later in life, they are accessible in extreme cases. This option does not require a check of your credit history since you will be pulling from your own money. This is not the same as setting aside funds from your monthly salary.
By borrowing from your 401(k) to cover your dental loans, your monthly payments will be streamlined since the fees are deducted from your paybacks until the completion of payment of the loaned sum.
Also, the interest rates are usually low, and you can typically borrow much as high as half of the amount in your account. Before withdrawing funds or making changes to your 401(k) plan, speak with your portfolio manager or a third-party financial advisor. There can be penalties associated with accessing funds in a 401(k) before you’re eligible. Understanding this impact before you use this resource for dental or medical care is important to consider.
Knowing how much money to borrow
Choosing the right loan or financing option is just the start. How do you know how much you need to borrow from these sources to cover your expenses?
You will need to speak with your dentist regarding the costs associated with the medical work you need done. These costs can vary greatly depending on the provider, location, experience level, skillset, and other personal and professional qualities. Make sure that you have this conversation before any work is started to avoid hidden fees. This includes any conversation about financing or rates if you’re pursuing a payment plan with your dentist.
With a sense of how much money is required, you should check with your selected lender to make sure you’re qualified to borrow the right amount to finance your needs.
What is the best way to finance dental work?
The right financing will vary from person to person. You will have to consider the financing options or loans available to you and your personal circumstances to find the best fit and make an educated decision. When evaluating these options, be sure to fully compare rates, fees, and terms. It’s also important to consider the impact of your credit history and your insurance eligibility before choosing a loan.
You may go with interest-free installment offers provided by a dentist. Checking whether your credit card will offer 0% APR on new purchases. Whichever option you choose, you should always plan to repay the total loan amount within the stipulated repayment period to make sure you don’t find yourself paying expensive interest charges.
Another option is to check with multiple lenders and compare the pros and cons of all available loans. Not every loan is the same: make sure that the lender’s offer fits your budget and that the terms are compatible with your ability to repay the loans in full. You should also compare loans against the total cost or rates available from other sources and non-traditional dental work options.
How do you get dental work when you can’t afford it?
Dental work is generally expensive, and not many people can afford the high cost of dental healthcare. That is why many people opt for free or low-cost dental care. This does not mean that you should avoid necessary procedures or prophylactic visits that can preserve your health and your smile. There are options available if you don’t qualify for dental loans and don’t have the money to afford the costs of proper care.
Community Dental Clinics
Visiting a community dental clinic can be a good option if you’re looking for low-cost dental work. Students from dental schools and volunteers facilitate these community dental clinics to help others, and their charges are usually relatively low.
While they provide you with cost-effective dental services, they also help train student dentists and other dental healthcare professionals. This option is often open to community members who are truly in need to help them get the care they deserve.
Uninsured Payment Plans
Uninsured payment plans offered by some dentists or clinics are another option for affordable dental care. Here, the dentist or clinic offers payment structures that enable the patient to pay by installment or monthly payments. This version of dental financing is most often offered by clinics to uninsured people to help them get proper medical treatment.
While some clinics require that you pay a part of the fee or pay in full before commencement of dental care, others accept terms that allow for payment after the dental work has been completed. This may not be the best option if you’re not in a great position to pay back the balance, depending on the fee structure.
Dental Savings Plans
If you don’t have personal dental insurance or corporate dental insurance offered by an employer, you can still get dental work when you can’t afford it. While insurance requires a waiting period before a patient is granted access to care, dental savings plans do not.
Savings plans are an alternative to dental financing. With these, you can obtain care for pre-existing conditions without limitations. Dental plan members get access to dentists and dental procedures at reduced rates plus an estimated savings of 10-60%.
Dental savings plans are customizable to fit almost all budgets. They cater to different dental care requirements from basic care to complex dental procedures such as denture fittings, dental implants, braces, teeth cleanings, root canals, and even other dental procedures. You can also usually choose the dentist you prefer.
Find the right dental loan for you, no matter your credit score
While bad credit does require you to get more creative when finding a dental loan, you still have options. Whether you take out a loan or borrow from your home equity or 401(k), you can find a way to finance the dental work you need. Just be proactive and weigh the costs and benefits of each loan type to find the one that’s right for you.
Ready to start shopping around? Check out what the best personal loans are to ensure that you choose the best option for you, and head over to our personal loan offer engine to find out what you qualify for today!
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.