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Paying for orthodontic braces on finance raises a number of interesting issues.
First, parents need to determine how much money to borrow. The cost of braces varies based on the method. For example, Invisalign is more expensive than traditional alternatives. Also, this affects the down payment that the orthodontist may require.
Second, you can choose between installment loans and revolving credit card accounts to fund the down payment. Each has unique pros and cons. In addition, many orthodontists then bill monthly for services rendered over time.
Finally, people with bad credit have to be extra creative. Many orthodontist and finance companies shy away from approving patients with poor payment history. Fortunately, some alternatives do exist that apply to everyone.
Orthodontic Braces Financing Options
The primary financing options for orthodontic braces fall into three main categories. Choose between unsecured personal loans, revolving credit card accounts, and monthly payment plans through your local provider.
Each alternative has unique pros and cons. Many parents find that a combination of at least two approaches works best for them overall – especially for funding the upfront down payment, or in meeting the income requirements for Invisalign.
Personal loans are a viable option to finance dental braces. Personal loans are unsecured installment contracts that feature fixed monthly payments. By making the fixed payments on time you will retire the balance in 2 to 5 years – depending on the terms.
Many families take out an unsecured personal loan to cover the initial down payment. Once you have funded the initial deposit, many orthodontists bill monthly for services rendered further on in time.
Request a personal loan here. (Affiliate Link) This is what to expect.
- Submit your credentials to an intermediary company
- The company markets the information to a broad lender network
- Volume helps to improve the likelihood of an approval
- Show sufficient income and provide employment verification
- Provide bank routing and account numbers
- Verifies your identity and limits fraud
- Allows lenders to transfer money quickly
- Ensures prompt monthly payment
Monthly payment plans through your orthodontist is often a good financing option for braces. Orthodontists provide the service over a span of three years on average, and bill accordingly. They perform significant work upfront for installation, and then follow up with each patient regularly to make tension adjustments, and perform minor repairs.
Most orthodontists ask for a certain percentage of the total treatment fee in advance and spread the remainder in scheduled monthly payments over the expected course of the treatment. The best-qualified patients can negotiate a low down payment amount.
Expect your orthodontist to present a payment plan agreement for your signature. This protects the practice from any default on your part.
Care Credit is a popular dental braces financing option because of the possible zero-percent interest rate. They offer a revolving credit card that often features a promotional period of 6, 12, 18, or 24 months.
The Care Credit promotional period features no interest when you make the minimum payments and retire the balance in full by the end of the promotional period. However, making the minimum payments will not retire the balance in time.
Care Credit will charge 26.99% interest to your account beginning from the purchase date if you do not retire balance in full within the promotional period. Therefore, be prepared to pay far more than the minimum in order to avoid these very high-interest rates.
Invisalign financing options can require more detective work because they often cost more than traditional braces. In addition, most insurance plans will not adjust the benefits upwards. This means that you must borrow more money when paying for Invisalign on finance.
The higher costs of Invisalign translate into larger monthly payments for financing. This should not present an issue provided the lender deems the amounts affordable. However, many companies consider a debt-to-income (DTI) ratio when making underwriting decisions. They could deny your application if the DTI is too high.
Financing Braces with Bad Credit
Paying for dental braces with bad credit presents serious challenges for parents. First, it is much more difficult to get a company to approve your application if you have a history of late payments. Second, it is also very hard to raise the money for a down payment when you are already behind.
Fortunately, options do exist for families with low FICO scores.
- Medicaid covers braces in many states for children
- Financial assistance programs can help low-income families
No Credit Check
It is possible to finance orthodontic braces with no credit check. Patients with a bad credit history can seek out lenders that consider income only and do not pull a copy of your traditional consumer report (Equifax, Experian, TransUnion).
No credit check companies specialize in serving people that cannot win approvals from traditional banks and lenders. They operate under a different model. Therefore, expect to encounter these tradeoffs.
- Pull financial data from an alternate report provider
- Pay higher origination fees (the amount subtracted from the initial proceeds)
- Pay higher interest rates (up to 36% in some states – depending on qualifications)
- Provide more information about yourself during the underwriting phase
- Proof of income
- Proof of employment
- Bank account and routing numbers
No Down Payment
Finding an orthodontist with no down payment requirements might help parents with bad credit to overcome the first hurdle – if you can find one near you. However, most orthodontists are small business owners and cannot afford to delay income or deal with delinquent patients.
Therefore, most orthodontists touting a no down payment option actually refer patients to finance companies. In turn, these companies turn down applicants with bad credit history. It is a dead end.
Flexible spending accounts (FSA) offer a better method to overcome the down payment challenge – if available at work. First, choose to participate during your company’s annual enrollment period. Then, schedule the orthodontist to begin shortly after the new plan year.
Your employer must reimburse all qualifying FSA claims immediately – even before any money comes out of your paycheck. You then have up to 52 weeks to repay your employer using pre-tax dollars.
- All bad credit applicants qualify
- The employer cannot perform a credit check
- Pre-tax elections reduce your costs by avoiding three types of taxes
- FICA payroll taxes
- Federal income tax
- State income taxes