If parents do not have dental insurance for braces, they must pay all orthodontic costs for their teens.
Families with dental insurance for braces might still pay 75% of the costs. Coinsurance and benefit limits apply.
Families might still pay 75% of the costs with dental insurance for braces. Coinsurance and benefit limits apply. How can parents with several children afford orthodontic treatment?
Monthly payment plans can spread costs over time, making it easier for families to fit treatment into limited budgets. Learn the pros and cons of six financing options and pick the best alternative for your family.
Braces Financing Programs
Financing programs are the traditional way to establish a payment plan for dental braces. Patients borrow money from a lender to pay the orthodontist upfront for services. They repay the debt later in monthly installments.
Personal Loans
Patients can use personal loans to finance braces. A personal loan is an unsecured installment contract with fixed monthly payments.
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Loan Pros
The primary advantage of personal loans is the freedom to choose the best local orthodontist. If approved, the lender deposits money into the patient’s checking account.
Having enough cash in the bank allows you to choose any orthodontist. Pick the one with the best reputation or lowest prices. You do not limit your choices to providers offering in-house financing.
Loan Cons
The main disadvantage of personal loans is lenders always charge interest and origination fees. The costs vary based on your credit score, income, and employment qualifications.
- Origination fee: a one-time upfront charge ranging from 1% to 10%
- Interest rate: a periodic charge ranging from 5% to 36%
Medical Credit Cards
Patients can use medical credit cards to finance braces. A medical credit card is an unsecured revolving contract with flexible monthly payments.
Medical Credit Pros
The main advantage of medical credit cards is the possibility of zero borrowing costs. Some cards come with promotional offers, such as interest-free periods if you pay off the balance within a specified timeframe.
Responsible use of a medical credit card can also help build your credit score if you make timely payments. Many lenders report to Experian, Equifax, and TransUnion.
Medical Credit Cons
Medical credit cards have three significant disadvantages. Patients should be aware of these drawbacks before applying.
- Dental patients with bad credit may not qualify. Lenders do not automatically approve every applicant. You must be creditworthy and have enough income.
- Lenders send the money directly to the orthodontist, not your bank account. Not all orthodontic offices accept medical credit cards, which can limit your choices.
- Interest rates can be very high if you do not pay off the balance within the promotional period. Deferred interest charges often exceed 30%, increasing overall costs.
Buy Now Pay Later
Young adult patients often use buy now pay later (BNPL) programs to finance dental braces. BNPL lets them make a purchase and pay for it over a series of installments.
BNPL Pros
The main advantage of BNPL is that patients without an established credit history often qualify. Many young adults use BNPL instead of credit cards and have no file at Experian, Equifax, or Transunion.
For instance, NewSmile clear aligners refer young adult patients to Affirm, a leading BNPL company. They currently promote a $51 monthly payment with zero money down.
BNPL Cons
The main disadvantage of BNPL is that few orthodontists accept this option. National online retailers typically offer BNPL, not small local offices.
The NewSmile example shows this. NewSmile operates online and serves customers nationwide. However, clear aligners may not work for severe malocclusions because they can’t fix significant jaw misalignment.
Flexible Spending Account
Parents can use a Flexible Spending Account (FSA) to establish a monthly payment plan for orthodontic braces. An FSA is an employee benefit that allows you to use pre-tax money to pay for out-of-pocket healthcare costs for family members.
FSA Steps
An FSA is not a financing program but works similarly. Parents can use an FSA to have their employer pay the orthodontist upfront. They then make payroll contributions later in the year.
Take these steps to make an FSA work like a loan.
- Choose to contribute to an FSA during open enrollment at work. The current annual maximum is $3,300 for the year, enough to cover Invisalign® costs spread over three years.
- Schedule your first appointment with the orthodontist early in the FSA plan year. Most employers have a January 1 start date.
- Pay the orthodontist using your FSA debit card. Employers must reimburse up to the annual election, even before contributions.
- Contribute to the FSA during the remainder of the plan year through payroll deductions. The frequency matches the pay cycle: weekly, bi-weekly, or monthly.
FSA Pros
An FSA has many advantages, so every parent with teens needing braces should participate, regardless of their borrowing qualifications.
- People with bad credit qualify automatically. Only highly compensated employees and company owners face possible denials.
- Employers cannot check your credit report or score. Employers must accept every employee, even with a history of charge-offs, repossessions, or bankruptcy.
- Pre-tax payroll deductions reduce your income subject to three possible taxes: federal income, state income, and FICA. The savings can range up to 38% for middle-class families.
FSA Cons
Accessibility is the main drawback to an FSA. Not every family can benefit from loan-like features and tax savings. Your or your spouse’s employer must offer the benefit. Not all employers do.
- You cannot implement an FSA if you are self-employed. This limitation includes sole proprietorships, partnerships, and S-Corporations.
- You cannot establish an FSA as an individual. People buying insurance through healthcare.gov can set up a Health Savings Account (HSA) but not an FSA.
- An FSA does not help you build credit because you are not taking out a loan. Employers do not report this information to Experian, Equifax, or TransUnion.
Local Orthodontists
Choosing a nearby orthodontist who offers in-house payment plans for braces is the least effective way to arrange financing. It is better to prioritize providers who promise the straightest smile at the lowest price.
3rd Party
Many orthodontists offering in-house payment plans refer patients to third-party finance companies. Would you stop by your local bank branch and ask if they can install, adjust, or remove dental braces?
Of course not. The bank would refer you to an orthodontist. Similarly, most dental offices point parents to medical credit cards.
You put yourself at a disadvantage by waiting until you are in the orthodontist’s office. The medical credit card company might deny your application. Then what will you do?
Do yourself a favor. Arrange financing before stepping foot in a provider’s office. Request a loan, contact a medical credit card company, or enroll in an FSA at work.
1st Party
Many orthodontists offer in-house payment plans without referring families to third parties. However, these programs are more like phased billing than financing.
The process begins with a hefty down payment to cover upfront costs.
- Medical and dental evaluations
- Bite impression study models
- Panoramic X-rays
- Computer-generated images
- Before photographs
- Appliance installation
The process continues with smaller periodic bills as services are provided. Most patients visit their orthodontists every six to eight weeks until treatment concludes after two to three years.
- Make tension adjustments
- Perform minor repairs
- Remove the appliances
- Fit and fabricate retainers
