How do dental loans work?

A dental loan can be a fast and flexible way to pay for dental expenses not covered by insurance. Among the procedures a dental loan might cover are:

• Dental implants.

• Veneers.

• Teeth aligners.

• Braces.

• Dental crowns.

• Emergency procedures.

Online lenders, some banks and credit unions offer personal loans that can be used for any purpose, including dental care. Personal loan rates generally range from 6% to 36%, and terms can be two to seven years.

To qualify you, lenders consider your credit score, income and existing debts. If approved for a dental loan, you’ll receive the money in a lump sum in your bank account, typically within a few days. You then use the loan proceeds to pay for dental or orthodontic care. Going forward, you’ll make fixed monthly payments to your lender until the end of the loan term.

Each type of lender has different borrower requirements, rates and loan terms, so it’s best to pre-qualify with multiple lenders to see potential loan offers and compare options to find a loan with monthly payments that fit your budget.

» MORE: Personal loans for cosmetic surgery

How to compare personal loans for dental work

Annual percentage rates and fees. A personal loan's APR can be higher than its interest rate because it reflects the entire cost of a loan, including any fees. Some lenders charge origination fees ranging from 1% to 10% of the loan amount. Other possible fees include late payment and returned payment fees.

Borrower requirements. Some lenders have minimum income or credit score requirements. Or they may allow a maximum amount of debt compared to your income, expressed as a debt-to-income ratio.

» MORE: What are the requirements for a personal loan?

Time to fund. While some lenders offer same-day funding, others can take up to a week. You can speed up the application process by gathering all the required documents before applying and promptly responding to lender questions.

Repayment term. A longer loan term can mean smaller monthly payments, but it can also result in more interest over the life of the loan.

For example, a $2,500 loan with a five-year term and 8% APR will require a $51 monthly payment and cost $541 in total interest. The same loan with a seven-year term would put the monthly payment at $39 but cost $773 in interest.

» MORE: Best medical loans

How to apply for a dental loan

1. Check your credit report. You can get your free credit report on NerdWallet or at AnnualCreditReport.com. Review your report and fix any errors before you apply.

2. Calculate your loan payments. Use a personal loan calculator to estimate monthly payments on personal loans with different rates and loan terms. Identify an amount and term that works with your monthly budget.

3. Pre-qualify. Compare rates and offers with multiple online lenders to find the lowest interest rate. This part of the process involves a soft credit check, which won’t affect your credit score.

4. Select a lender and loan option. Pick the loan with the rate, monthly payment, loan amount and term that best covers the dental work you need and fits your budget.

5. Complete and submit the application. Most lenders will let you apply through their website, while some banks or credit unions may ask you to apply in person. Read and understand the fine print of your loan before you submit an application. The lender will do a hard credit check, which may drop your credit score by a few points. 

Once approved, depending on the lender, you may receive your loan within a day or two.

Dental loans for bad credit

Borrowers with fair or bad credit (a score of 689 or below) can apply for a dental loan, but you’ll likely get a rate on the high end of a lender’s APR range.

Some bad-credit lenders may look beyond credit score and consider other factors like cash flow, employment and education history, which can help your chances of approval.

Avoid loans with APRs above 36%, which is the maximum rate deemed affordable by financial experts and consumer advocates. A three-year, $3,000 loan with a 36% APR costs almost $2,000 in interest.

If you have bad credit, consider a co-signed or secured loan to receive a lower rate.

» MORE: How to get a personal loan with bad credit

Alternative dental financing options

Personal loans can be an expensive way to finance dental work, so weigh other options before applying for a loan.

Here are alternative ways to fund dental work:

Financing through your dentist. Some dentists offer an in-house payment plan when patients are faced with a hefty bill. Payment plans can be a good option if you don’t have insurance or would rather make monthly payments toward the procedure. You may be charged interest or a fee for setting up a payment plan.

You may also be able to negotiate a lower cost with your provider. Check the prices in your area using a site like fairhealthconsumer.org, and see how your dentist's costs compare.

» LEARN: How to pay off your medical bills

Dental school. Dental schools offer procedures at reduced prices so students can get experience under the supervision of skilled dentists. You can check the American Dental Association’s list of dental programs to see whether there’s a school near you.

Credit card for medical expenses. Some offices offer financing through a credit card for medical expenses like CareCredit. The standard APR for CareCredit financing is 29.99%, but you can get 0% interest if you charge $200 or more and pay it off within a six, 12, 18 or 24-month term. If you aren’t able to pay off your balance, you’ll be charged interest retroactively from the start of the term.

0% credit card. If you have good or excellent credit (a score of 690 or above), you might qualify for a 0% APR credit card. These cards have an introductory period — usually 15 to 21 months — when you won’t accrue interest on purchases. If you can pay off your balance within that period, you’ll pay for the procedure interest-free.