Dental Payment Plans: Pros & Cons
Sometimes dental care can cost thousands of dollars and, if a patient is without dental insurance or lacks full coverage dental insurance, he or she may delay necessary care and allow a dental problem to become worse. While we always recommend shopping for a comprehensive dental plan, there are options a consumer can explore in the event they can't afford a dental procedure needed urgently. One common option offered by many dentists is a dental payment plan.
What Is a Dental Payment Plan?
A dental payment plan is a program offered by a dentist's office where an expensive procedure can be paid for in smaller amounts over time. Normally there is a written agreement defining how much is owed, what the installment payments are, how long the installments must be paid, and what fees or interest will be charged alongside the original cost of dental care.
Is a Dental Payment Plan a Good Idea?
The answer to this question, unfortunately, is it depends on the payment plan. Before agreeing to a dental payment plan, a consumer should do the following:
- Consider a second opinion and price quote from another dentist
- See if the care can be obtained for less money from another source such as a dental school or dental charity
Assuming the above options convince you to pursue dental care from your existing dentist, you need to determine how much the full cost of the dental payment plan is versus the cost of the care. The full cost of the payment plan includes each installment you pay (including the interest) as well as any application fee. For example, imagine you need $3,000 of dental care and your dentist offers to perform the work and charge you $150 a month for two years plus a $250 application fee. At the end of this payment plan, you would have paid $3,850 for $3,000 worth of dental care.
$150 x 24 months = $3,600 + $250 application fee = $3,850
$3,850 is about 28 percent more than the original cost of $3,000. In comparison, if you received a bank loan for the $3,000 and they charged 9% interest over two years, your monthly payment would be $137.05 and your total payments would be $3,289.20.
Another factor to consider is whether the dental payment plan has an early repayment penalty. An early repayment penalty charges you a fee if you pay off the balance of the payment earlier than the term specific in the plan. In some cases, a repayment penalty can be $100 or more.
Alternatives to Dental Payment Plans
Dental payment plans are not the only option for people who can't immediately afford the dental care they need. There are very inexpensive dental discount programs as well as public services available for low-income individuals and families. For information on more alternatives to dental payment plans, see our article "How to Finance a Dental Procedure." This resource discusses payment plans along side loans and other financing options. Finally, don't assume dental insurance is beyond your budget. The home page of DentalInsurace.com allows you to see a variety of dental insurance plans available in your zip code with a broad range of prices points and benefit designs.