Installments make it much easier to handle the cost of dental work, but there’s no guarantee your dental professional will offer this option. Even if they do, you need to know whether what they offer is a good choice, or not.
When you can’t borrow through your dental professional, it may seem you’re stuck paying out-of-pocket. However, that’s seldom a realistic choice. Dental work is costly. Just getting a checkup and cleaning can easily cost you several hundred dollars.
If you’re in pain or you’ve damaged a tooth, a visit the dentist is often a must and you will undoubtedly pay more. A filling can cost you over $250, and that’s without complications. A crown could cost upwards of $500 and a root canal around $2,000.
So, if you must have work done and you don’t have money in your bank account, what are your options?
Government Dental Coverage
Those that are unemployed or earn a small income, may qualify for Medicaid. If you do, you may not need to worry about the cost or installments, since the government picks up the tab. However, Medicaid only guarantees coverage for children up to age 19. Coverage for adults isn’t a sure thing, since it is determined by each state.
Medicaid.gov mentions most states provide at least emergency dental services for adults, but less than half offer comprehensive dental care. If you qualify for Medicaid, you must contact your state agency to see if they offer adult dental benefits and specifically what they offer if they do.
For those that cannot qualify, you have other alternatives, some good and some less advisable.
Dental Credit Card
In recent years, a few credit card companies started offering cards specifically for dental work. Many dental professionals accept them, because they’re guaranteed payment. Nonetheless, that doesn’t mean they are a good solution for you.
These credit cards are touted as a way to pay out-of-pocket expenses not covered by medical insurance, but they do have drawbacks you should consider.
First, these cards are subject to credit approval. As a result, new borrowers, students, and those with less than pristine credit may not qualify.
Second, new borrowers are usually charged a high Annual Percentage Rate (APR), typically around 26.99%. If you do not pay the entire balance within the grace period of your card’s billing cycle, you are charged interest from the purchase date. In other words, you pay daily interest. Some lenders also charge a minimum interest amount, regardless of your purchase amount.
The lender tacks this interest onto your unpaid balance. If you haven’t paid off the balance the next month, you pay interest on this new, higher balance. Essentially, you start paying interest on interest. This “compound” interest increases your indebtedness unnecessarily.
Finally, using a credit card may not be the best solution if you want to methodically pay down your debt. You aren’t required to pay regular installments, so you may be prone to pay less than you probably should.
However, that can lead to more unnecessary interest and the potential for more debt that initially planned. Of course, that also makes it harder to repay what you’ve borrowed.
Installment Loan
An installment loan can offer many benefits over other financing options, providing you choose wisely. They have a fixed interest rate and installments (payments), so there are no surprises down the road.
However, many lenders offer installment loans, so it important to know what to look for. Let’s examine a few of the most important considerations.
Credit Score or Income
For those with fair, good, or excellent credit, obtaining an installment loan is pretty straightforward. However, those with a short credit history or less than pristine credit have fewer choices, but it is certainly still possible to get an installment loan.
In this case, choose a lender that does not set a minimum credit score requirement. Regrettably, that usually means you can’t borrow through traditional lenders such as banks and credit unions. That’s because they normally have very strict qualification requirements and place heavy emphasis on credit. However, you still have plenty of choices if you want a loan so you can pay in installments.
Next, look for a lender that emphasizes your income paid. Generally, you need to be paid by direct deposit and receive a recurring income. The best place to find these lenders is online, but you may find a few in-person lenders in your area too. However, they usually aren’t as convenient, fast, or simple.
Convenience, Simplicity, & Speed
Applying through in-person lenders isn’t very convenient. You may need to make an appointment and even if you don’t you still need to take time out of your busy day to visit the lender.
On the other hand, you can apply for an online installment loan any day of the week and at any time. Furthermore, online lenders tend to offer a much simpler process.
For instance, a good online lender offers a simplified application form that usually takes less than 15-minutes to complete. They can offer this shortened version, since their only interested in your recent history, not where you lived, worked, or banked years ago.
Additionally, online lenders tend to use the latest technology to speed up the process. As an example, a good lender utilizes digital income verification, instead of asking you to fax, scan, or upload documents. They also use digital document signing, instead of expecting you to deliver signed documents to them.
Of course, borrowing online usually means a speedier process too. Once you’re pre-approved and documents are signed, it is just a matter of transferring funds electronically. This may be done via a bank transfer or email money transfer, depending on the lender. If everything goes smoothly, a good lender can have money in your hands within 24 hours.
Pre-Approval Process
No matter which way you decide to go when you apply for an installment loan, always choose a lender that utilizes a pre-approval process. Why is this important? This process does not impact your credit score.
Conversely, a traditional “hard” credit inquiry can lower it by as much as 12-points. Creditors also pay attention to these credit inquiries and they remain on your credit file for up to 3 years. Should you apply through many lenders, it may appear you’re struggling to obtain credit, even if you’re just shopping for a loan.
Fortunately, when you choose a lender that uses pre-approval, you can easily compare what each one’s offering, without lowering your credit score. If a lender does not use pre-approval, you could just receive a “no” and a big dent in your credit score.
No Fees or Penalties
Many lenders make it appear that you should expect to pay certain fees and penalties. One of the most common is an origination fee. This is basically an administrative charge for setting up your account and processing your application.
This fee can vary widely, ranging from 0.5% to 10.0% of your total loan amount. However, it is incorrect to suggest that you will pay a higher interest rate over the life of the loan if you choose a lender that does not charge one. Many trustworthy lenders absorb this administrative expense as a normal cost of doing business. You should not pay an origination fee.
Another unnecessary cost many lenders levy is a pre-payment penalty. This is a charge for paying more than your scheduled payments. For instance, you may want to make extra payments, pay a lump sum, or even pay off your loan early. The lender charges this fee to help them recoup the interest they would have earned if you’d paid scheduled payments instead.
Fortunately, it is easy to avoid pre-payment penalties. Look for an “open” loan. It allows you to pay extra at any time, without penalty.
Transparency
When choosing a lender, you want them to be upfront with you. For the most part, the basic qualification requirements for an installment loan should be pretty straightforward and they should tell you what they are.
You can expect them to ask you for your name, address, telephone number, and Social Security Number or Individual Taxpayer Identification Number to confirm your identity. However, from this point forward things can differ.
An online lender will ask for banking information so they can confirm your income and transfer your funds to your bank account electronically. An in-person lender will probably ask for pay stubs, a letter from your employer, or an income statement.
The point is, always choose a lender that provides this sort of information upfront. It prevents you from wasting time and improves your chances of approval.
Bottomline on Paying Installments for Dental Work
Yes, it is certainly possible to pay for dental work through installments. As mentioned, if you are unemployed or low income, it is in your best interest to explore whether you qualify for Medicaid in your state first.
Otherwise, your best option is an installment loan. Dental credit cards charge unnecessary compound interest which means you pay more. Even if your dental office offers installment loans, you shouldn’t automatically choose theirs, since you may have better options.
Fortunately, you can obtain an installment loan based on your credit or your income. One can provide anywhere from a few hundred to thousands of dollars with repayment terms and payments to suit your life.
If you’re interested in paying installments for dental work, FlexMoney may be able to help. We offer installment loans of $200 and $2,000, with 12-months to repay.
Our installment loans charge simple, not compound interest. We do not charge an origination fee or pre-payment penalty. FlexMoney operates completely online, so you will enjoy a simple and fast process, from start to finish.
Visit our website for more information or to start the application process now. We also offer more information on our installment loans here so you can make an informed financial decision.