The short version
- A dental loan is a personal loan for treatment your health fund doesn't fully cover.
- Ask your dentist about payment plans first.
- Get a written treatment plan and quote before you apply.
Paying for dental work with a personal loan
Medicare covers little dental work for adults, and health fund extras cover often has yearly limits well below the cost of implants, crowns, veneers or braces. A dental loan is a personal loan used to spread that gap over one to seven years. Any general-purpose loan above can be used this way, and most are unsecured.
Ask your dentist for a written treatment plan and quote first, and check what your health fund will pay. Many practices also offer payment plans, which may cost less than a loan.
How to compare dental loans
Look at the comparison rate as well as the interest rate. The comparison rate adds the lender's standard fees to the interest rate for an example loan, so it shows the cost of two loans on the same footing.
Then look at:
- The term and repayments. Check how long the loan runs, what each repayment would be, and whether there's a fee to pay it off early.
- Fees. Look for establishment fees and monthly fees, which add to the cost.
- The amount. Make sure the loan covers the whole treatment plan, including follow-up visits.
- Who can apply. Check the lender's criteria on age, residency, income and employment before you apply.
- The lender. Check it holds an Australian credit licence and is a member of AFCA, and read what other borrowers say.
Pros of a dental loan
- You can have treatment now rather than waiting to save, which matters when a problem could get worse.
- A personal loan usually has a lower rate than a credit card's standard rate.
- Most dental loans are unsecured, so your car or home isn't at risk.
- You can choose a term with repayments that fit your budget.
Cons of a dental loan
- Interest and fees add to the cost of the treatment, and unsecured rates are higher than secured ones.
- A long term means years of repayments for treatment that's already finished.
- Lenders check your income and credit history, so not everyone is approved.
Your protections
Personal loans from licensed lenders are covered by the National Consumer Credit Protection Act. Lenders must check the loan is not unsuitable for you, and you can complain to the Australian Financial Complaints Authority (AFCA) if something goes wrong.
Look at the comparison rate as well as the interest rate. The comparison rate adds the lender's standard fees to the interest rate for an example loan, so it shows the cost of two loans on the same footing.
Alternatives
- A payment plan with your dentist, often interest free.
- Your health fund's extras cover and any preferred dentists with lower gaps.
- Public dental services, if you hold a concession card.
- A No Interest Loan (NILS). If you're on a lower income, community lenders offer loans of up to $2,000 for essentials, with no interest or fees.
What you'll need to apply
Most lenders ask for the same things, and having them ready speeds up approval.
- Proof of identity, such as a driver's licence, passport or Medicare card.
- Proof of income, usually your last two payslips, or tax returns and financial statements if you're self-employed.
- Details of what you spend each month and what you already owe, including credit card limits.
- Your address history and, for a secured loan, details of the asset you're offering as security.