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Dental Financing 101:Answers for the Questions Patients Often Ask

Industry statistics provided by Colonial Life indicate that 74 million US residents did not have dental coverage in 2017. This creates a real need for different forms of dental financing. If you are among these 74 million or even those who are underinsured, it pays to learn as much about different dental financing plans as possible.

The following are questions that patients often ask before they apply to any type of financing for dental procedures. Take a close look at the answers and you’ll be able to decide if one or more of these solutions is right for you.

What Are My Options for Financing?

With around 30% of the US population in need of some sort of financial help for dental treatments, it pays to know what sort of financing is available. Here are the most common forms of dental financing:

  • Credit Cards: Depending on the expense of the dental procedure or treatment, patients may choose to use one of their credit cards. Assuming the interest rate is low, this makes it possible to pay off the balance at a pace the borrower can afford.
  • Personal Loans: A loan from a local bank, secured or unsecured, may be used to cover the dental expense. This approach offers fixed monthly installment payments that are easier to fit into the budget.
  • Medical Credit Cards: These credit cards are only used to pay for medical treatments. That includes dental work. Like any credit card, there is interest applied to the balance and a minimum payment that must be remitted each billing period.
  • Dental Loans: These loans are offered by institutions that offer financing for dental treatments and procedures. Terms and conditions vary based on the applicant’s history and present circumstances. Like any loan, at least the fixed monthly payment must be remitted every billing period.

Does My Credit Score Matter?

With any financing option, your credit score will be taken into consideration. This doesn’t necessarily mean a low score will disqualify you from being approved. Currently, the average credit score in the United States is 687. Even if you have a score that is considered poor (601 or below,) there’s still a good chance of being approved. All it takes is finding a dental payment plan that includes terms and conditions that you can honor.

Why Would I Choose a Dental Loan Over Other Financing Options?

Dental loans are one of the most attractive forms of medical financing. That’s true for several reasons:

  • Easy application process; it often takes 30 minutes or less
  • Great odds of being approved
  • Affordable monthly payments
  • Competitive rates; in 2017, it was possible to lock in a fixed rate as low as 5.74%
  • Fast evaluations and decisions; you may know if your application is approved the same day
  • Funds are made available quickly

Keep in mind the interest rates and terms will vary based on your credit score, recent credit history, and your gross monthly income.

Will I Need to Make a Down Payment?

Down payments with dental loans is not uncommon. Expect to pay around 15% of the projected cost of your dental procedure up front. The remainder can be covered by the proceeds from your financing.

This is not a bad thing. The down payment reduces the total amount that must be financed. That translates into less money that you have to pay over the life of the loan. It also means that the monthly installment payment will be a little lower.

Are There Fees and Charges That I Can Expect to Pay?

Medical lenders of all types, including those who loan funds for dental procedures, are likely to assess at least a few fees. The best way to know what fees and charges to expect is to review the information provided by the lender.

Be on the lookout for information about loan application fees, payment processing fees, and loan evaluation fees. You also want to be aware of any type of finance charges or penalties that apply if a payment is not received and posted by the due date. Being clear on what sort of fees can occur and what must happen in order for them to be assessed will help you decide if a particular lender is right for you.

Can I Apply If I Have a Bankruptcy on My Credit Reports?

The status of your bankruptcy action is likely to impact the ability to receive financing. This is true for two reasons. First, a bankruptcy that is still active impacts your ability to repay the loan balance. Second, many district courts that manage bankruptcy cases forbid debtors from incurring additional debt until their cases are discharged.

This means if you are currently making payments as part of a Chapter 13 bankruptcy, you are likely ineligible for dental financing. That is true even if the court of jurisdiction would allow you to take on a small amount of new debt for situations related to your health.

If your Chapter 7 or Chapter 13 bankruptcy is completed and discharged, most lenders will consider your application.

I Already Have a Dentist. Will I Have to Use a Different One?

Lenders who offer dental financing plans typically operate by signing up dentists who choose to participate in their programs. This allows them to have a roster of local dental professionals on hand for applicants who need dental care but do not currently use a particular dentist.

If you have a dentist, check to see if the practice is included on the roster. That confirms your dentist is considered to be an in-network partner and you are free to continue using that professional’s services. Should your dentist not be a partner at present, the lender can contact the professional and provide information on how to become part of the network.

Alternatively, you can choose to see one of the dentists who are part of the network. That practice or clinic can help with the process of obtaining the dental records from your previous dentist.

Can The Financing Be Used for Any Dental Procedure?

Remember that dental financing is not the same as dental insurance. While the latter has limits on the scope of benefits, both in terms of annual dollar limits and the types of procedures that are covered, a financing plan can be used for any kind of dental treatment or procedure.

This means you could use the funding from the financing to cover basic dental care like annual checkups and teeth cleanings. The money can also be used to manage the costs associated with or veneers, caps, extractions, dentures, or implants. Even emergency dental services can be paid for using the financing plan.

Does Having Dental Coverage Prevent Me From Receiving a Dental Loan?

No. You may participate in a group dental plan through an employer or purchase your own personal dental insurance and still apply for some type of dental finance arrangement.

If you have dental benefits through Medicaid or the children are covered through the Children’s Health Insurance Program (Chip,) it’s also possible to qualify for some type of dental service loan. Doing so will not affect your benefits.

Keep in mind that according to the Health Policy Institute, approximately 38% of dentists in the United States accept patients covered by CHIP or Medicaid. There’s a good chance that many of them also accept one or more options for dental financing.

Will the Financing Cover What My Dental Insurance Doesn’t?

Patient financing like a loan typically kicks in once your dental insurance has paid everything according to the terms and conditions found in the policy. It even covers some of the up-front expense if necessary.

For example, assume you need to have a tooth extracted. Your insurance benefits require a flat deductible to be paid up front and then covers 80% of the remainder. If you have a financing plan already approved, it will pay the deductible at the time the extraction is done. Once the insurance company pays the 80%, the remaining balance is settled from the financing.

Dental insurance plans include schedules of payments so you know which procedures are covered and what sort of copays or deductibles apply to each one. That makes it easier to project the amount you will need to finance and submit the application before undergoing the procedure. Assuming you are approved, it’s possible to have the work done and not worry about having to retire the full balance immediately.

Where Does the Money Go?

Once you are approved for any type of dental treatment financing, the funds are usually made available within 24 business hours or less. The money is not usually remitted directly to the patient. Instead, the funds are remitted to your dental professional. This comes after the professional prepares and submits documentation outlining the nature of the procedure, a breakdown of charges, and authorization from you approving of those charges.

This works well for you because there’s no need to deposit a check or wait until the money is electronically deposited into your bank account. As soon as the dental clinic has confirmation that the funds are scheduled for release, the procedure can take place.

What you will receive is a breakdown of the schedule for repaying the loan. The better dental payment plans offer monthly installments that will fit into your budget without causing any financial difficulty. Remember that you can always make additional payments when and as you like.

How Do I Check My Loan Balance and Payment History?

Many lenders of dental loans provide online access that patients can use to manage their accounts. Doing so involves setting up the access with a user name and a password.

A growing number of lenders are requiring multi-factor authentication to access the account data. This usually means providing a third and maybe a fourth bit of identifying information before you can actually see the account details.

For example, you may have to answer a privacy question that you set up at the time you opened the account. It may also be necessary to identify elements in a series of images before you progress to the account details.

Once you have access, it’s easy to see your current balance. You can also review a list of past payments and the days they posted. If you have any pending payments, they will also be listed.

While in your account, you can submit an electronic payment. Paying loans and other obligations online is becoming more common in all age groups. According to a study published by ACI Worldwide, 61% of millennials pay their bills online. Gen Xers are next, with 60% preferring online payments to writing checks. 52% of baby boomers use online payment solutions. Even a significant number of seniors (42%) now pay their bills using secure online interfaces.

Can I Qualify For Additional Loans?

Your initial round of financing sets the stage for being able to receive additional financial help in the future. The key is to manage that first loan responsibly. You can do so by:

  • Making your payments on time
  • Logging in and reviewing the status of pending payments
  • Choosing to make an additional payment when and as you are able to do it
  • Communicating with the lender if you encounter any short-term issues that might prevent you from making a payment on time

Once you have successfully settled your first loan, it’s possible to apply for another one. Many lenders will not require you to provide the same basic data again, provided that second loan request is received within a year of settling the first one. You can still expect for the lender to run a quick credit check, but the process for reviewing the second loan application is usually faster.

The choice to seek dental care financing is up to you. Take your time and review all of the options carefully. Ask questions when anything seems to be unclear or you are not able to find the answers in the literature provided by the lender. You’ll find that the right lender provides clear answers to your questions and may even anticipate some of the others that are on your mind.

Once you are satisfied that the plan offered is the right one for you, submit your application. After you try this solution once, you will never have to wonder how to go about financing dental care of any type again.