According to Statista, the United States conducted more than four million cosmetic procedures in 2020 alone. This means that the U.S. has continued to be the biggest provider of cosmetic surgeries in the world. However, many patients who seek to undergo cosmetic surgery may be unaware of the financing options available to them.
What Does it Mean to Finance a Cosmetic Procedure?
If a patient chooses to finance their cosmetic procedure, they are responsible for repaying the total cost of their procedure as well as any additional fees and interest being charged by lenders or payment plan companies. Payments are generally split over many months or even a few years. This mitigates the potential for patients to become financially burdened.
Financing Factors to Consider
Patients should compare their financing options to ensure that they are getting the best deal possible, whether using a credit card, loan, or payment plan to repay their medical debts. Specifically, patients should pay attention to borrowers’ requirements, including income, age, citizenship status, and credit score. Further, patients should consider the APRs, late payment costs, and origination fees various lenders propose. Patients should also assess any potential discounts offered to them by lenders.
In some instances, patients can prequalify for loans online through loan matching companies such as Nerdwallet or via the websites of potential lenders. This is beneficial because it only requires a soft credit check, as opposed to a hard credit check which drops applicants’ credit scores by a few points. Pre-qualifying is a good way for patients to find out the financing options available to them through various companies.
Patient Financing Options
Medical Credit Cards
Medical credit cards, such as those offered by Care Credit, are a popular financing option among cosmetic surgery patients. Care Credit cards can be used to pay for medical deductibles, copayments, and medical treatments that health insurance agencies do not cover. These cards can be used for covered or elective medical services only, and applicants must meet several requirements. Patients are required to have a credit score of 620 or higher to qualify for the card. Applications result in a hard credit check but there is no account activation fee.
Most patients are required to pay 27% APR. Although, 0% APR may be available through certain providers if minimum monthly payments are met and debts are entirely repaid during six-, 12-, or 24-month promotional terms. If payments are not finished by the end of a patient’s promotional period, interest is compounded from the original loan date, making this option exponentially more costly. Patients are required by Care Credit to spend a minimum of $200 on purchases.
Personal Loans
Personal loans can be taken out for many reasons, including to finance cosmetic surgeries. Generally, medical loans have an APR range of 6% to 36%, and any amount between $1,000 and $50,000 can be borrowed. It should be noted that lower APRs are reserved for patients with excellent credit, with a minimum score of about 690.
Discover offers personal loans ranging from $2,500 to $35,000, with APRs of 5.99% to 24.99%. Applicants must have a credit score of at least 720 and make an annual household income of $40,000 to qualify for loans through Discover. Notably, the average credit score of Discover’s borrowers is 750. Loans can be repaid for periods of three to seven years. Benefits offered by Discover include that the company does not charge loan origination fees, and borrowers can manage their loans using a mobile app. But, borrowers do not get a discount for setting up automatic payments and will have to pay fees for late payments.
Upgrade offers loans between $1,000 and $50,000 to borrowers over terms of two to seven years. To qualify, those who apply must have a credit score of at least 560. There is no minimum income requirement for applicants. Loan origination fees range from 2.9% to 8% for those who qualify. But, the company offers a 0.5% discount for borrowers using autopay.
Best Egg offers personal loans, ranging from $2,000 to $50,000. These loans have origination fees between 0.99% and 5.99%, APRs ranging from 5.99% to 35.99%, and terms of about three to five years. Applicants must have a credit score of 700 or higher to be considered for Best Egg’s loans. However, applicants must have excellent credit and make a minimum income of $100,000 per year to obtain the lowest APR possible. Patients approved for Best Egg’s loans can receive funding in just a day. There are no prepayment penalties for these loans. However, there is a late fee of $15 if payments are three or more days past due, and there is a $7 processing fee for any non-automatic payments made.
Payment Plans
For reference, payment plans can be arranged via in-house or hybrid in-house financing. To finance cosmetic procedures in-house, patients and surgical practices create payment plans without the influence of a third party. Some perks of in-house financing include low- or no interest, no penalty for early repayment, and transparent fees. Unlike credit card companies or loan services, in-house financing only requires a soft credit check, which does not affect applicants’ credit. Patients can apply for in-house financing remotely with just a few clicks!
Hybrid in-house financing takes place when a third-party acts as a financial go-between for a patient and medical practice. This third party must ensure that patients continually meet all legal and contractual requirements of their payment plans. While patients can still sign up for hybrid in-house financing through their medical practice, their payment plan is outsourced so that medical practices do not have to act as financial companies. Hybrid in-house financing is more simple for patients than financing via independent credit or loan companies. Under hybrid contracts, patients tend to pay lower interest rates than financing through an outside company.
Conclusion
Overall, cosmetic surgery patients who cannot afford to pay for their procedures upfront would benefit from the availability of all of the above financing options. Yet, hybrid in-house financing is likely the best option available for patients with poor credit scores. The company Denefits is unique because it provides hybrid in-house financing to 100% of payment plan applicants and does not run credit checks to determine the options available to patients. Through Denefits, patients’ APRs tend to be around 20%, which is highly competitive, particularly for those who have poor credit and would be forced to accept the maximum APRs offered by loan or credit card companies. Additionally, lower APRs may be available to patients depending on the length of their repayment periods. Visit the Denefits website today to learn about how patients can get cosmetic surgery financing with any credit score.
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