Dental work can be expensive – more so as Medicare does not cover most dental work. The full cost of taking care of your teeth falls on you. You may be left out of pocket even with private health insurance. If you have upcoming dental bills, you can take out a dental loan to help you.
What is a dental loan?
A dental loan is a personal loan used to finance dental work. You can take out a dental loan to pay for your dental bill in its entirety or you could use one to bridge the gap after private health insurance.
The loan may be a standard unsecured or secured personal loan. There are also specialised loans from a specific lender. Some dental practices also offer their own payment plans, or may be partnered with interest-free buy now pay later services. In some cases, credit cards can also be an option to pay for dental bills.
⚠️ Warning about Borrowing
Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
How do dental loans work?
With a dental loan, a lender or a bank lends you money to cover the cost of your dental bills. Depending on the type of loan, you may be able to borrow as little as $100 or as much as $50,000.
A loan for paying dental bills works the same as any other loan. You have a repayment period, during which you have to make regular payments. These payments will include interest and fees. Depending on the loan you apply for, the loan term will also vary. There are short-term, high-interest loans called payday loans, which have terms starting from 16 days. Other personal loans may have repayment periods starting from 1 year.
What can I use a dental loan for?
You can use a dental loan for just about any dental procedure. This can include cosmetic dental procedures, general or orthodontic treatments. This can range from getting braces to root canals and fillings to teeth whitening.
How much does dental work cost?
Most people are aware that dental work can be expensive, but just how much does it cost?
It varies greatly. For instance, the lowest cost for a dental check-up can be $40 but averages on $166.
Likewise, white fillings can range from $130 to an average of $244. Wisdom tooth extractions can start from $150 but go beyond the average of $366. Root canals can start at $550 and go well above the average of $1,225.
Braces can cost anywhere between $6,000 and $15,000 depending on the type of braces. For families with 1 or more children in need of braces, the costs can really add up.
What does Medicare cover?
Medicare only offers coverage in some instances, and these may not apply to you. If you're a concession card holder or if you have children and can't afford to pay, you may be eligible for free dental with Medicare. You may also access public dental services.
How much does private insurance cover?
What you can pay for through dental insurance depends entirely on your insurer and the kind of coverage you have. Some policies will cover a certain percentage of your bill. Others may pay a set amount for specific treatments or services. There may also be limits to how much you can claim each year.
How can I finance my dental bill?
If you're looking at getting a dental loan, there are a few options you can consider:
- Secured loan. A secured loan requires an asset to be put up as loan security, such as a vehicle, home equity or jewellery. You can generally use the funds however you wish, but you may only be able to borrow up to the value of the asset. The asset must have a value greater or equal to that of the loan. Secured loans come with lower interest rates and higher borrowing limits. However, if you default on the loan, your asset can be repossessed. You can borrow from $1,000 to $100,000 with a secured loan.
- Unsecured loan. An unsecured loan does not require an asset as collateral. Because of this, the interest rates are higher and borrowing amounts smaller. You can use the loan funds for any purpose, including paying dental bills. You can borrow from $1,000 to $50,000 with this option.
- Specialised dental loan. Some lenders offer loans tailored to dentistry and can help you finance a range of procedures. Specialist loans include payment plans offered by your dentist, as well as third-party providers.
- Short-term loan. You can borrow from $100 to $5,000. While short-term loans are convenient, these also come with high fees and charges. For payday loans up to $2,000, you can be charged an establishment fee of 20% and a monthly fee of 4%. The cost when added up could be quite high. For example, a payday loan of $2,000 with a 1-year term would cost you $3,360 in total. That's a cost of $1,360 for interest and fees alone.
- Overdraft. An overdraft facility can be set up with your current bank and linked to your existing transaction account. This facility allows you to overdraw your account up to the given limit. This limit will be agreed upon by the applicant and the bank and will depend on the financial position of the borrower. Some banks offer overdraft facilities in excess of $25,000. With overdrafts, you only have to pay for what you borrow. Interest charges will apply. If you have a good relationship with your bank, you may be able to get an overdraft even if your credit isn't perfect.
- Line of credit. This is a form of revolving credit. Here the lender gives you ongoing credit up to a certain limit. You can borrow when you want and pay for what you've borrowed, not the entire credit limit. Interest charges apply on the amount you've borrowed. In contrast to lump sum loans like secured or unsecured loans, you can borrow the money as and when you want it.
- Credit card. You can also use a credit card for dental work. Depending on your limit, you may be able to cover your dental costs. Keep in mind that interest rates on credit cards are higher than other personal loans. There is also no set repayment period, so you may fall into debt if you don't stay on top of your payments.
- Buy now pay later. These providers frequently partner with dental clinics to offer interest-free credit for dental procedures. With buy now pay later, you get to break up the cost into instalments and repay it without interest. The terms are generally short at around 4 or 5 fortnights. If you make all your repayments on time, you won't be charged extra fees.
Can I get dental work abroad?
Given how expensive Australian dentistry is, it's no wonder that a number of Australians head overseas for dental work. This is also known as "medical tourism". Keep in mind that there will be additional expenses involved. Apart from the cost of dentistry, you should also account for flight tickets and accommodation. It may be cheaper to pay a local dentist. If you do decide to get medical work done abroad, it's important to have the right insurance as there may be risks involved too.
How can I compare my dental loan options?
If you're wondering which type of finance is right, here's what you need to consider:
- How much does the loan cost? In addition to the loan principal, you should consider interest and comparison rates. The comparison rate is presented as a percentage and gives you an indication of the true cost of the loan. Comparison rates are inclusive of interest and associated loan fees. Checking the fees is important as some loans come with low interest rates but high fees. This drives up the cost of the loan and may offset the savings you make with low interest rates.
- Can I afford the loan? Does the loan sit comfortably in your budget or will you be left out of pocket? If it looks like you'll be struggling with repayments, you should consider another loan.
- Does the loan amount cover my dental costs? Check the minimum and maximum borrowing amounts. This should help you understand whether or not the loan will give you sufficient financial coverage. You can also speak to lenders to get a better idea of whether the loan amount is suitable for your needs.
- Do I want the funds in a lump sum or on an ongoing basis? If you want funding on a revolving basis and not in 1 go, then a loan that allows this may be the best option.
- Am I eligible for the loan? Check the lender's requirements for the borrower. You should only apply for a loan if you tick all the boxes and meet the lender's minimum requirements. If you don't meet their criteria, your application is likely to get rejected.
- Will I be able to get the funds in time to pay my bill? Most lenders now have online applications. Keep an eye out for their application processing time and how long it will take for you to receive the money. You should receive the money when you need it.
- Are there additional features I would like to have? For instance, can you repay the loan early or make additional repayments?
Can I withdraw my super to pay for emergency dental work?
In most cases, you won't be able to access your super until you reach the preservation age. However, there are some situations where you may be able to access your super early. Under "compassionate grounds", you can apply with the Department of Human Services. This will enable you to access your super early to pay for medical costs. This includes dental work.
Before accessing your super, you should also consider if it's the best option. There may be more suitable options. You should also look into the drawbacks of withdrawing your super early.
How can I apply for a dental loan?
🤔 Work out what type of loan you need, how much you need to borrow and what you can afford.
🔎 Start comparing lenders and loan products. Don't forget to compare interest rates, fees and eligibility criteria. You can use Finder's comparison table.
✅ Select a lender. Click "Go to site" to be directed to the lender's page, or "More info" if you want to read about the lender.
🖨️ Organise and prepare the required documentation. This will make the application process easier.
📱 Apply. Most lenders have their applications online.