Does this sound familiar to you? You’ve gone to the dentist because your teeth are killing you. They do an exam and tell you that you’ll need surgery done. You complete the surgery, and a few months later, your bill comes. It’s way higher than you expected, and your insurance barely put a dent in the total. There’s no way you can afford to pay on your own, and you don’t have credit, so you start looking for dental loans with no credit check.
Whether you know it or not, this is a common situation that many people find themselves in. The American Dental Association reported that the average cost of dental care per patient was $685 in 2013. Among the 90th percentile that required specialized care, the cost jumped to $1,624 per patient. That’s a lot of money for even those at the upper end of the blue-collar world to afford all at once. If you have no credit or poor credit, that only makes the situation worse.
With all of that in mind, I can understand why you’d be seeking a loan that doesn’t require a credit check. But here’s the thing: it can be a big gamble. Read ahead to discover the hidden risks that you may be taking by opting for a no credit check loan to fund your dental care.
You Risk Paying More Than Your Loan is Worth
Many no credit lenders advertise themselves as quick, easy ways to get money. While they often follow through on this promise, you can be sure they’re compensating themselves for taking a risk on you. The Consumer Finance Protection Bureau reported that the average APR for payday loans, title loans, and other similar types of no credit check loans was 339% in 2017.
To illustrate that monetarily, here’s an example: if you borrow even just $100 at 339% APR, your total repayment would be $439. That’s $339 in interest and fees, plus your original amount of $100.
As is often the case with no credit check loans, borrowers ultimately end up paying far more than the loan is worth.
You Risk Becoming Trapped in Debt
While there are options to get no credit loans that won’t try to take advantage of your circumstances, they are rare. The majority of no credit check loans are borderline scams designed to ensure that you’ll continue paying on your loan, while never fully paying it off.
The Method of Entrapment
Typically, shady no credit lenders use a variety of tactics to ensure that you default on your loan. These tactics include:
- Short repayment times (typically two to four weeks).
- Severe interest rates and APRs.
- Cutting off communication until you’ve already defaulted.
- Adding excessive late fees and interest to extend your loan after your first missed payment.
- Continuing to charge you as you miss payments.
The purpose of these tactics is always the same – to ensure you owe so much to the lender that you continue to pay them for a long time to come.
You Risk Losing Other Assets
Aside from high APRs, many no credit loans require collateral in order to secure the loan. Often, this comes in the form of your car. These types of no credit loans, called title loans, are set up so that you will end up giving your car to the lender. The scam works the same as I described in the last section, except that instead of offering you an extension after a missed payment, the lender will simply seize your car.
Even if they don’t require your car, no credit lenders often charge very high fees for the “convenience” of using their service, sometimes as much as 75% of the loan’s value. That’s far too great an investment for a dental bill of any amount.
You Risk Being Scammed Completely
Even though the lenders I’ve discussed in the last few sections are shady, they will at least actually lend you money. There are some folks advertising themselves as no credit lenders who have no intention of giving you any money at all.
Primarily, these are online and “over the phone” predators who advertise themselves as lenders offering fast, easy no credit check loans. In reality, they’re scammers who will take money from you up front and then disappear without a trace.
How to Spot Scammers
Even as laws are implemented to combat them, scammers continue to change their tactics to continue duping loan-seekers and lawmakers. It’s an on-going battle, but there are some telltale signs to watch out for:
- Advertise as fast and easy, with no credit check required.
- They aren’t registered. The Federal Trade Commission requires that all lenders register in any states they plan to do business in.
- They only want to talk over the phone. It’s illegal to finalize loans over the phone.
- They don’t maintain an address. This makes them difficult to trace.
- They require some form of down payment to “secure” your loan.
- They tell you that your offer expires soon, and you must act now.
You Risk Losing Out on a Better Deal
By far the biggest risk you take by opting for a no credit loan is missing out on a better deal. While it may often seem like you have no options to pay off your dental bills if you have no credit, in reality, there are many. There are even some options that don’t require you to borrow money at all.
Take Out a Bad Credit Loan
Even if you think you have no credit, the reality is that you do. Every person has a credit history, even if you’re not generating a credit score. Check your credit reports and see where you can provide enough data to produce a score. Usually, you can do this by spending a little more on your credit card or report more of your monthly payments (utilities, cell phone bill, etc.).
Even a bad score between 450 and 550 can still afford you some options to get a very high-quality loan. Bad credit loans can often get you your money with 24 to 48 hours and can go as high as $70,000.
Negotiate Your Costs Down
While there’s no getting around how expensive medical costs are, many insurance and medical providers aren’t heartless. They’ll often work with you to reduce the final amount of your bill.
Always ask for an itemized list of services you received during your dental appointment. Check it to ensure you actually received everything you were charged for. Sometimes, both insurers and medical billing departments make mistakes. Even if everything is correct, ask both the dental practice and your insurance if they’re willing to pay off or reduce any of the charges.
Set Up a Payment Plan
Most billing departments know that their services cost a lot, and are willing to work with you on your payment schedule. Be prepared to show your bank statements as proof of how much you make versus how much you spend on essentials. This will help you plead your case to the dental clinic, and negotiate a monthly payment that you can afford.