Dental loans: How expensive are they and are you eligible?

There’s a niggling pain at the back of your mouth and you know you have to visit the dentist to find out what’s going on – but you really, really don’t want to.

It’s the visit we all dread, right? Even an initial consultation is expensive, and if we’re experiencing pain, there’s a good chance something is amiss and we need treatment.

When it comes to fixing problems with our teeth, the costs can quickly blow out. A large filling can cost $200–$300, while a crown can set you back $1,500-plus. A root canal? You don’t want to know…

Unless, of course, you need to get one. Even if you have health insurance with extras cover, the out-of-pocket fees can be huge. I recently found out I needed a crown and the quote was $1,550. My health insurance covers $500, meaning I’m out of pocket by over $1,000.

Paying for expensive but much-needed major dental treatment can add a lot of stress to your plate. But rather than putting it off until you can save up enough money to pay for it, you could consider taking out a dental loan.

What are dental loans?

A dental loan is a form of personal loan that is used to finance dental work. Dental loans work by a bank or lender letting you borrow money to cover the costs of dental surgery or other dental costs. Depending on the type of loan, potential borrowers are generally able to borrow up to $10,000 to spend on dental work.

It usually comes in the form of a standard unsecured personal loan, which is the type of loan a bank gives you to purchase anything you want, no strings attached.

You may also apply for a secured personal loan. This means the debt is attached to an asset that the lender has the right to repossess in the event you’re always defaulting on your repayments and aren’t prepared to work towards a potential solution with the lender.

How much do dental loans cost?

As with all types of personal loans, it depends whether the finance is secured or unsecured. If it’s unsecured – meaning, the loan isn’t attached to an asset – the interest rates can be a little higher. In the current market, and depending on your credit rating, they’re usually around 7–29% per annum.

This means a $2,500 debt with a 17.90% interest rate over 12 months would cost you $62 per week. The total interest you’ll repay over the 12 months is $447.50 plus whatever set up fees the lender may charge. These costs essentially enable you to:

• Access money when you need it, rather than waiting to save up

• Get dental treatment now, before the problem gets worse

• Split the cost of the treatment into smaller, manageable payments rather than one lump sum

A secured personal loan is usually attached to some sort of asset (such as a car or house) as security. This means the risk to the lender is a little lower, so it may be willing to give you a cheaper interest rate.

Generally, the higher the loan amount, the longer the loan term you can choose, meaning you’ll pay more interest overall, but your monthly repayments will be lower. However, this will depend on your personal financial circumstances, loan type and risk profile.

From a simple check-up to more comprehensive reconstructive or cosmetic surgery, a dental loan may help you manage the financial side of getting dental work you need. Make sure you weigh up all the costs, fees and charges involved before deciding to apply for a loan that could add pressure to your monthly budget.

Frequently Asked Questions:

Can I use any dentist or medical practioner?

Yes, you can use your dental loan at any dentist or orthodontist, the choice is yours!

Are there any fees for paying out my dental loan early?

Some lenders may charge you early payout fees, but we don’t. We want to see you succeed and keep more in your wallet.

How much can I borrow for a dental loan?

If you choose Fair Go Finance, you could borrow from $300 up to $10,000 for any dental-related expense. We can’t tell you the amount you can borrow, or your interest rates, as we need to assess your exact financial situation.

Are dental loans easy to get?

It depends on your financial situation and credit score. The higher your credit rating, the easier it will be to secure a dental loan.

Written by Sarah Megginson

Sarah Megginson is senior editor of home loans for Finder. She was previously managing editor of Australian Broker magazine, Your Investment Property magazine and online home loan comparison site, Your Mortgage. Sarah is a regular media commentator on all real estate and home loans and has worked as a finance and property journalist for more than 15 years.