Dental Implants with Low Monthly Payments
An ideal solution for people missing one or more teeth, dental implants are commonly used to restore appearance and functionality. When compared to other options, such as traditional dentures, dental implants tend to be a more expensive restoration option. Dental implant patients can expect to pay $1,500 to $3,000 per tooth and should additional jaw or gum restoration procedures be necessary, additional costs will be incurred.
While considered the medical standard for replacing teeth, dental implants are not covered by most dental insurance plans and as such, patients can expect to be out of pocket for a portion or all of the cost. Should a patient requiring dental implants not be able to afford them outright, financing options may be available. To qualify for financing, a good credit score is generally required which leaves nearly half of dental implant patients unable to finance the cost of treatment.
Patients with low credit scores or without the means to pay for dental implants out of pocket have options. This article will evaluate some of the more common options available to these patients.
Sub-Prime Lender Financing
Should a patient not qualify for a standard credit-based loan, subprime lender financing is often the first option. Standard lenders require a credit score of at least 640 for approval whereas subprime lenders examine more than just the patient’s score. Employment history, income, and other information are evaluated to determine the risk of lending to the patient.
Subprime financing arrangements are not without their downsides. Generally, they come with high fees and interest rates which puts a further financial strain on the patient.
Home Equity Line of Credit
Homeowners that qualify, may find taking out a home equity line of credit (HELOC) a suitable option to finance the cost of dental implants. While HELOC loans are often used for home renovations or covering a child’s tuition, their low interest rates and tax treatments can make them ideal for homeowners with no other means for paying the cost of dental implant treatment.
Similar to a credit card, a HELOC is a revolving line of credit that patients can borrow against up to their credit limit. Because the loan is collateralized by the borrower’s house, failure to repay the loan could jeopardize the home. And if the borrower sells the house, most HELOC plans will require the credit line be repaid at the same time which could further exacerbate financial difficulties.
Personal Loans
Patients with poor credit could apply for a secured or unsecured personal loan through a bank or credit union. Collateral, such as real estate or a car is required for a secured loan and both improves the odds of approval as well as increases the loan amount. The lender can repossess the collateral should the patient default on payments.
Unsecured loans do not require collateral from the patient. Lacking collateral to repossess in the event of default, delinquent unsecured loans are sent to outside collection agencies to follow up with the patient. Because the lender assumes more risk in these financing arrangements, unsecured loans may be difficult for a patient with low credit to qualify for.
Credit Cards
Credit cards can be another financing option for cash-strapped dental implant patients that offer their own pros and cons. One advantage offered by some credit cards are ability to earn awards, such as cash-back or frequent flyer miles, with purchases. Patients with stronger credit may also qualify for zero or low percent interest rate offers allowing the dental implant procedure to be financed over 12-18 months.
A limitation of credit cards is that the cards which offer the best awards or interest rates are often reserved for those with stronger credit scores. Additionally, any introductory interest rates are contingent upon consistent payment meaning if the patient has difficulty keeping up with payments and becomes delinquent, the interest rates will skyrocket. Not only will the higher interest accumulate quickly, the patient’s credit score will be negatively impacted due to the poor payment history.
Borrowing from a Retirement Plan
For patients that have access to them, borrowing from a retirement account such as a 403(b) or 401(k) is often a viable method for paying for dental implant surgery. This option has multiple advantages including low interest rates, low monthly payments, and the ability to extend payments over a period of five years. Interest rates are generally between 3% to 5% and are not dictated by the patient’s credit score. Additionally, the interest paid over the course of the loan is deposited back into the patient’s retirement account rather than to a lending institution.
It should be noted that there can be potential tax implications and/or IRS penalties whenever taking funds out of retirement accounts. As such, patients would be wise to discuss any such strategies with a CPA or tax professional prior to taking funds from retirement accounts.
Flexible Pay-Over-Time Plans
Regardless of a patient’s credit score, pay-over-time lenders, such as Healthcare Finance Direct (HFD), are another option that works for all dental implant patients. The underwriting process HFD uses is unique in that it is data-driven and considers more than just credit score when determining finance risk. Interest rates are set based on information gathered so as to mitigate risk to the provider. Patients can conveniently make payments, receive customer support, and access account information through a client portal.
Flexible Spending Account
For the 2021 tax year, the IRS allows employees to deposit up to $2,750 of their pre-tax income into a Flexible Spending Account (FSA). FSA funds can be used to pay uninsured healthcare expenses, tax-free. Should a patient only need one or two dental implants, FSA funds could cover the majority of the procedure cost.
Using FSA funds to cover dental implant costs has another major benefit in that the accounts are essentially “self-funded” over the course of the calendar year via payroll deductions. So, while the FSA funds can be used all at once, their accumulation occurred gradually throughout the year. Additionally, using FSA funds is interest and tax-free.