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, which is 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 — 12.38 percent versus 20.10 percent, respectively.

Before taking out a dental loan, explore alternative financing options. This may help you save money and avoid a hard hit to your credit. If you do need to borrow money, shop for quotes from multiple lenders to ensure you are choosing the most cost-effective option to cover your dental work.

What is a dental loan?

A dental loan is a type of medical personal loan used to pay for dental expenses. Like other personal loans, they have fixed monthly payments and interest rates. In addition, they are usually unsecured loans, meaning they don’t require you to pledge any collateral. 

You can apply for dental loans through a bank, credit union or online lender. Loan terms and interest rates vary based on your creditworthiness. Borrowers with strong credit and a high income will qualify for the lowest rates, which start at under 7 percent. Those who have less-than-perfect scores may receive higher interest rates, and that translates to a more expensive dental loan.

That said, be cautious when using a loan — or medical credit card — to cover dental procedures. A KFF healthcare debt survey found that 24 percent of adults currently have medical or dental debt that they are unable to pay off. To avoid being part of that statistic, prequalify with at least three lenders and estimate how much you will spend each month and overall. 

How much do common dental procedures cost?

What you will pay out-of-pocket for a dental procedure depends on what your insurance covers — if you have it. Humana list some cost ranges for common dental procedures, but expect your price to depend on your location and medical needs.

Compare dental loans

To ensure you get the best rates on a dental loan, you should prequalify with at least three lenders. While most lenders don’t restrict how you use your loan funds, you could have more success with financing by going with a lender that offers medical loans.

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 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 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 significantly increase your borrowing cost or reduce your loan amount. In addition, some charge prepayment fees, penalizing you for paying off your loan 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.

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 have 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.

Dental financing with bad credit

Financing can be difficult to obtain when you have less-than-stellar credit, but with a little work, you can find lenders that offer financing for bad credit.

Review your credit reports

Your credit reports can contain errors that lower your credit score, so reviewing them at least once a year is a good idea. You can view each credit report for free weekly from all three major credit bureaus — Experian, Equifax and Transunion — by visiting AnnualCreditReport.com.

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 than someone with good credit.

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.

Request quotes

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 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. In some cases, medical providers may even offer special financing terms, like 0% APR credit card.

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.

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% APR medical credit card. In addition, don’t underestimate the importance of getting quotes from multiple dental providers to see if 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.