How to Finance Dental Care for Patients with Bad Credit

When patients with toothaches come to your dental practice and find out that they need urgent dental work totaling thousands of dollars. The last thing they want to do is spend days in pain awaiting approval responses from lenders. Patients become even more disheartened when discovering that their poor credit restricts them from accessing any good financing options. 

Some lenders will not even consider offering loans or credit cards to borrowers who have underdeveloped credit histories or bad credit scores. Other credit card or loan companies will offer to finance. But punish borrowers with high APRs, short-term only offers, extra fees, and more strict requirements. This means that those who are able to get funding may not be able to afford to use the confining offers. They receive to undergo immediate dental intervention.

Why do so Many Patients Require Financing?

Often, medical insurance agencies do not fully pay the costs of necessary or elective dental procedures. As a result, patients have to gather thousands of dollars or find a lender willing to help them finance dental goods and services in just a few days despite potentially having poor credit. 

Historically, individuals who could not afford to pay for goods or services financed them via credit cards. Credit cards are a trusted and convenient way to pay purchase-related bills over time. However, credit cards do not cater to the needs of borrowers with bad credit statuses. The restricted terms do make clear this, strict prequalifications, and absurdly high APRs of over 30%.

If a patient used a credit card with 30% to help cover a $2,000 procedure to receive a dental crown, they would have to pay upwards of $600 in fees. Additionally, if the patient only made minimum payments on their credit card, they would be paying for their procedure over many years, which can cause a more significant financial burden than patients feared initially when trying to finance their dental work.

So, you may ask, what funding options are available for patients who cannot qualify for loans via traditional primary lenders, such as CareCredit?

Helpful Financing Options for Patients with Poor Credit

Flexible Spending Account (FSA)

With a flexible spending account, an individual can use their pre-taxed wages to help offset the costs associated with receiving medical or dental care. This option is unique because employers who offer this type of account cannot look into a worker’s credit history and must offer all employees the ability to create an FSA. Also, employers may match a percentage of all of the contributions to an FSA. 

If an individual establishes an FSA, a certain percentage of each paycheck they get goes into their FSA to be used as they need. These funds are taken out before taxation. Taxes do not diminish the money in the account. Yet, an individual’s income tax rate decreases. In total, each person can have up to $2,650 invested in an FSA.

While many patients would likely find FSAs helpful in a pinch. These funds may be low or when healthcare costs are extremely high, such accounts are often overlooked. This is because employees often do not feel that they have extra money to invest in their FSA or do not anticipate having to receive care because they perceive their health to be good. Unless an individual has a chronic condition or is planning for their future, individuals rarely invest in their healthcare before visiting a practice.

Patients with FSA funds could simply charge their healthcare debit card and pay off either part or all of the costs of their dental bills upfront, saving them a big hassle and financial burden. But, patients should be aware that, unlike healthcare savings accounts. The money in FSAs must spend by the end of the year or it disappears, no matter how much money remains. 

In-House Payment Plans

Perhaps, pay-over-time plans offer the best solution to the necessity of acquiring healthcare financing with poor credit. To finance procedures in-house, patients and their providers establish payment plans in a direct contract, rather than a patient having to apply for funding options via outside financial companies who do not prioritize the best interests of patients and their providers. Some of the perks associated with in-house financing include the fact that there is low- or no interest, no prepayment penalty, and clearly outlined monthly charges. Additionally, when compared to credit cards or loans, in-house financing is beneficial for patients because medical practices only run a soft credit check, which does not impact applicants’ credit. 

Hybrid in-house financing occurs when a third-party financing company works with patients on behalf of medical practices. This company ensures that patients with in-house financing arrangements meet all necessary legal and contractual requirements. This form of in-house financing benefits providers in that patients’ payment plans is outsourced. Dental practices are not forced to act as billing departments. No matter which type of in-house financing is offered. It is simple for patients to apply online, from anywhere, in just a few minutes!

Hybrid in-house financing is more straightforward for patients than financing via an independent company. But this interest rate is typically lower than working with a disconnected financing institution. Hybrid in-house payment plans can be revised after a contract is mutually consented to if dentists approve such changes. Therefore, if a patient becomes economically burdened by outside costs. They can continue to live their daily lives without worrying about missing their due payments. Dropping their credit score, and tarnishing their credit history.

Companies Which Offer Pay-Over-Time Plans

Two of the companies that offer payment plans are Healthcare Finance Direct and Denefits.  Denefits and other payment plan companies – including Healthcare Finance. Direct- report patients’ payment history to credit bureaus in the best interest of patients who pay promptly.

Healthcare Finance Direct has many benefits for patients who seek pay-over-time plans. For instance, they offer low down payments, low interest, and high approval rates. This company does not penalize patients who pay off the balance of their plans early. Yet, Healthcare Finance Direct caters its services more to providers. While this sounds great initially, this company checks the credit scores of patients who apply for pay-over-time plans. Which could affect patients’ APRs and the terms of their agreements. This may push away customers who face exaggerated fees when in desperate need of dental work.

They do not check patients’ credit histories or credit scores to determine their approval. This means that there is an equal opportunity for all patients to obtain payment plans. Furthermore, Denefits innovatively created “social payments” wherein patients’ friends and family can contribute to their payment plans. Helping patients who may struggle financially and need help financing their healthcare. The payment plans offered through Denefits benefit both patients and dentists in the long run.

How can Denefits Help?

It approves virtually all payment plan applicants, regardless of their credit scores or histories. This means that anybody who needs help with guaranteed dental financing care can do so without worry.

Visit our website today to learn more about how we can work with your dental practice to offer. Your patients’ financing and help grow your cash flow.