When patients need to undergo an expensive procedure like receiving dental implants, which average between $1,500 and $3,000 per tooth and often more when gum or jaw restoration is required, they’ll often have to cover a portion or all of the cost out-of-pocket. Despite dental implants being the medical standard for tooth replacement, they’re not covered by most dental insurance policies.
When a patient requires dental implants but can’t afford them out of pocket, there are financing options available. Most of these options require a good credit score to qualify, which leaves nearly half of patients unable to finance the cost of dental implants. There are a few common options available for patients with low credit scores, so let’s take a look at some of them:
Sub-Prime Lender Financing
Traditionally the first option for patients that don’t qualify for a standard credit-based medical loan through a primary lender like CareCredit or GreenSky is to apply for subprime lender financing. Typically, standard lenders require a minimum score of 640 for approval, but subprime lenders take a deeper look at a patient’s history beyond their credit score. Income, employment history, and other information available through alternative sources are examined to understand the risk associated with lending to the patient.
There are some downsides to subprime lender financing plans. They usually come with high interest rates and origination fees for the patient. Not only do they put further financial strain on your patient, they don’t benefit your office because the money goes to the lender. And, while the terms of the loan are set by a third-party lender and not your office, they may reflect poorly on your practice in the eyes of patients if they appear to be unfair.
A second option for patients with less-than-stellar credit is to apply for a secured or unsecured personal loan. Secured loans require some collateral from the patient, such as a car or real estate. The collateral improves their chances of approval and increases the loan amount. If the patient defaults or the account becomes delinquent, the lender may repossess the collateral.
On the other hand, unsecured personal loans don’t require any collateral from the patient. Delinquent unsecured loans will be sent to an outside collection agency that follows up with the patient. These loans are harder to qualify for with bad credit since the lender takes on more risk without collateral. It may be difficult for a patient that doesn’t qualify for a credit-based repayment plan to be approved for an unsecured personal loan.
Flexible Pay-Over-Time Plans
Pay-over-time lenders like HFD are a third option that works for all patients, even those that have been shut out from traditional financing options due to a low credit score. When your practice partners with a lender like HFD, you’re able to increase the number of patients that you can treat.
HFD uses a unique data-driven underwriting process that considers more than just a simple credit report to determine the risk of loaning to a patient. The lender uses the data to determine the terms of an installment loan agreement that includes a down payment. They also use the information gathered to set interest rates that mitigate the provider’s risk. Best of all, your office keeps the interest on the payments, not HFD. With direct debit payments from the patient’s account, you don’t have to spend resources tracking down payments.
Not only is it easier for your office to approve more patients and make more money using a pay-over-time lender like HFD, it’s more convenient for the patients. They offer a payment portal where your office and patients can access payment information and receive customer service support.
Want to learn more about financing options for dental practices? Read our new eBook.