Cosmetic surgery is big business in the U.S., and most procedures aren’t cheap. If you don’t want to put off your procedure until you can save up the entire balance due, you may be able to finance it. There are several options when paying for plastic surgery:
- Credit cards
- Plastic surgery loans from your doctor
- Personal loans
- Home equity
- 401(k) loans
Each of these alternatives has its pros and cons.
Save $1,000 or more on your cosmetic surgery
There are ways to pay less for plastic surgery. Try shopping for a lower-cost provider, as long as he or she has a good reputation. Sites like RealSelf.com publish surgeon ratings that you can access for free, and you can also compare the cost among providers. Ask each surgeon whether or not a local anesthetic could be considered instead of more costly general anesthesia. Some surgeons may be willing to perform certain short procedures with topical anesthesia.
The easiest way to save on plastic surgery may be to finance it as cheaply as you can. The table below shows several different options for financing $10,000, assuming that you can afford a monthly payment of $500. Note that each option also has a minimum payment, which is lower but extends your repayment and increases your cost. That may be a factor if the monthly payment is your primary consideration.
To keep interest costs down, it’s ideal to pay off your loan as soon as you can.
The option that works best for you may be the one with the lowest cost, or the lowest monthly payment, or the one that doesn’t require home equity or qualifying for a new loan.
Paying for non-surgical procedures
Many consumers choose non-surgical enhancements because they can cost less, and because there is little or no down-time involved. However, most of those procedures lose their effect after six months to two years. There is nothing wrong with this, but you should avoid financing with a term that exceeds the benefit of the procedure. Avoid making payments on an old procedure when you need a new one.
Most experts recommend that you don’t finance short-term items with long-term loans. If your Botox or filler only lasts a six months, make sure you’ll have it paid for within that time period. Or, put off your next round of injections until you clear the debt, so it doesn’t snowball.
Personal loans vs. credit cards for plastic surgery
Personal loans and credit cards share some commonalities. They are both unsecured loans and you can get your money right away.
Why would you use a personal loan instead of a credit card? Because it’s likely to be cheaper. If your credit card offers rewards, you could get them by using the card for your procedure and paying it off right away with a personal loan.
Whatever your personal loan interest rate, it’s probably going to be less than that of a credit card. As of this writing, the average personal loan interest rate is just under 11%, while the average credit card rate is about 17%. That is because credit cards, with their open-ended terms, are riskier to their issuers. Personal loans, on the other hand, come with terms of one to five years and their rates are usually fixed. They are safer for lenders and borrowers alike.
Personal loan interest rates today range between 6% and 36% for mainstream products. The interest rate you’re offered depends on your credit rating, loan amount and term.
Another advantage of personal loans for cosmetic surgery is that they don’t affect your FICO score like increasing your credit card balances does. It may even make sense to take a larger personal loan and use it to clear your credit card balances as well as improve your appearance.
When are credit cards better than personal loans for cosmetic surgery? If you can get an introductory period with zero percent and pay off your balance during that time. Or if your credit rating has dropped and your personal loan cost would be higher than that of a credit card.
Loans from your doctor’s office
Some doctors offer plastic surgery loans or payment plans. They can range from interest-free to very expensive, so even if you ultimately choose one of these plans, get some quotes from other sources before committing. That way, you can feel confident that you are minimizing the cost of what is probably an expensive procedure.
If your doctor offers you a payment plan with zero interest, ask what your procedure would cost without the payment plan. The savings may more than offset the cost of financing plastic surgery, and third-party financing may give you more time to repay.
Medical credit cards
Medical credit cards are a sort of hybrid between traditional credit cards and personal loans. Like credit cards and personal loans, they are unsecured. Like personal loans, they have preset terms up to 60 months. Some medical credit cards allow you to reuse them for additional procedures once the first is paid off.
Medical credit cards may have another attractive feature — a low or no interest introductory period. However, be careful. One national lender offers an interest-free period as long as you repay the entire balance by the end of the promotional period. But if you don’t pay your entire bill before that period expires, your account is retroactively charged 27% interest on the original balance from Day One. Be careful when choosing that kind of financing.
Home equity loans for plastic surgery
Home equity loans are secured by your residence, and because of that, their interest rates are significantly lower than those of unsecured loans. If you already have a home equity line of credit (HELOC), and have enough available credit to cover your procedure, that may be the optimal choice.
But setting up a home equity loan just for your procedure could add a lot more to your costs than you’d save with a lower interest rate. And if you find yourself unable to make the payments, you are putting your home at risk for foreclosure. In general, home equity financing is best for larger amounts.
401(k) loans for cosmetic surgery
Borrowing against your 401(k) has some advantages, but also some serious drawbacks. The biggest advantage is that you’re borrowing from yourself, so the interest rate is less important. And your credit rating is probably not a consideration.
But you can’t contribute to your retirement account as long as you owe a balance against it, and if you take years to repay your loan, your tax-deferred retirement savings could take a major hit.
Even worse, if you lose your job for any reason, the unpaid balance becomes taxable, and unless you’re old enough to withdraw your funds without penalty, the government adds a 10% penalty to your tax bill. So if you have a $10,000 balance and a 25% tax bracket, it could cost you $3,500 if you can’t repay your balance before parting ways with your employer.
There are many ways of paying for plastic surgery, and a personal loan is not the only option. But, after checking your alternatives, it may be your best option.