Dental Implants with Low Monthly Payments
Patients needing to undergo an expensive procedure such as dental implant surgery, which can cost on average between $1,500-$3,000 per tooth, will often be required to cover a portion or all of the expense out-of-pocket. The need for additional jaw or gum procedures will also influence overall cost. While considered the medical standard for replacing lost teeth, dental implants are generally not covered by most dental insurance carriers.
With the high cost associated with dental implants and lack of insurance coverage available, patients that cannot afford them are often left looking for financing options. Often to qualify for these finance arrangements, a good credit score is needed which can leave roughly half of patients unable to finance the procedure.
Whether due to a poor credit score or insufficient funds, there are options available for patients that can allow them to afford the cost of dental implant treatment.
Sub-Prime Financing
Should a patient’s credit score disqualify them from a standard medical loan with a primary lender like Greensky or CareCredit, one of the first options is to apply for financing with a subprime lender. Primary lenders often require credit scores of at least 640 to approve a loan whereas subprime lenders, evaluate more of a patient’s history than just their credit score. Employment history, income, and information gathered from alternative sources are analyzed to determine the risk of extending financing to the patient.
Subprime financing plans do have some potential drawbacks. These financing plans often have high origination fees and interest rates for the borrower which can further exacerbate financial strain.
Personal Loans
Applying for a secured or unsecured personal loan is another option for patients whose credit scores may prevent them from traditional financing arrangements. A secured loan is backed by collateral, such as real estate or a car, from the borrower. Collateral can improve both the borrower’s chances of approval, as well as the amount of the loan. Should the borrower become delinquent or defaults on the loan, the collateral may be repossessed by the lender.
Unlike a secured loan, unsecured loans are not backed by collateral from the borrower. In the event of delinquency or default, an unsecured loan is sent to an outside collection agency to collect from the borrower. Without collateral, the lender assumes a greater amount of risk when issuing a loan so these loans are generally more difficult to qualify for with poor credit.
Pay-Over-Time Plans
Healthcare Finance Direct (HFD), is an example of a pay-over-time lender that can be an option for patients that have been unable to get traditional financing due to poor credit. Lenders like HFD, use data-driven underwriting processes to evaluate risk of lending to a patient beyond just a credit score. Data is used by the lender to determine the loan agreement terms and down payment. Interest rates are also set based on the data to minimize the lender’s risk.
Home Equity Line of Credit
Should the patient be a homeowner, financing the cost of dental implants using a home equity line of credit (HELOC) could be an option. Typically used for home improvement projects or to finance a child’s college tuition, HELOC loans offer low interest rates and their tax treatments can make them suitable methods for financing dental implants as well.
A HELOC, much like a credit card, provides a revolving line of credit the patient can borrow against. There is a maximum credit limit and the loan is collateralized by the borrower’s house. Should the borrower default, the home could be at jeopardy of repossession. If the borrower sells the home backing the loan, most HELOC plans require repayment of the credit line at the same time. If the borrower is already in financial difficulty, this could further exacerbate the situation.
Flexible Spending Account
While dental insurance itself may only cover a portion of dental implant costs, flexible spending accounts (FSA) can be used to pay for healthcare expenses, tax-free, that may otherwise have to be paid for out-of-pocket. IRS rules for the 2021 tax year allow an employee to deposit up to $2,750 of pre-tax income into a FSA. If a patient only needs one or two dental implants, FSA funds may cover the bulk of the cost of the procedure. Not all insurance plans offer FSA plans so employees should discuss with human resources or consult their benefit plan documents for details on availability and enrollment.
Paying with Credit Card
Using a credit card may be one of the last resorts for cash-strapped dental implant patients that provides its own advantages and disadvantages. One perk of using a credit card is the ability to earn awards, cash-back, or frequent flyer miles with purchases. With the cost of several dental implants potentially being thousands of dollars, patients using an awards card could help offset some expense of treatment. Patients with excellent credit, could also qualify for credit cards with zero or low percent interest rates over 12-18 months.
The biggest drawback to financing with credit cards is that the cards with the best awards or lowest interest rates, are typically only available to those with excellent credit. Attractive introductory interest rates are always contingent upon consistent on-time payments so if the patient cannot keep up with payments and become delinquent, interest rates will soar. As payments fall behind, high-interest rapidly accrues, and the debt further accumulates, the patient’s credit score will likely drop as well.
Borrowing from a Retirement Plan
If the patient has a retirement plan, such as a 401(k) or 403(b), dental implants could be financed by borrowing from the account. This option offers low interest rates, low monthly payments, and allows payments to be extended over a period of five years. Furthermore, the interest paid over the life of the loan is deposited back into the retirement account rather than a lending institution.
Because there can be tax implications and IRS penalties whenever taking funds out of a retirement account prior to age 59½, patients should always discuss such a strategy with a CPA or tax professional to ensure they don’t lose any of their hard earned money.