Paying for Plastic Surgery: How to Borrow Smart
Posted February 2, 2018 12:11 p.m. EST
Americans underwent 17.1 million plastic surgery (aka “cosmetic”) procedures in 2016 alone, more than double the number of procedures in 2000, according to the latest data from the American Society of Plastic Surgeons. That work doesn’t come cheap either — we spent a total of $16.4 billion on cosmetic procedures that year.
Due to the high costs of some types of plastic surgery, not everyone has the cash to pay for the look they want. That’s when some folks might consider taking out plastic surgery loans – financing options that let you borrow the money you need for cosmetic surgery and pay it back slowly over time.
Of course, there’s more than one way to set up plastic surgery financing, and there’s more than one way to pay down your balance after surgery is over. The key to successfully financing plastic surgery, according to the experts, is making sure you choose the right loan and having a financial plan to pay it off.
This guide will highlight the different cosmetic surgery financing options available as well as their pros and cons. With this information at your fingertips, you’ll be in a position to make an informed decision.
In this post, we’ll cover:
What does plastic surgery cost?
How to pay for plastic surgery
- Personal loans
- Medical credit card
- Credit cards
- Home equity loans or lines of credit
- Cash-out refinancing
- Cash savings
- Doctor payment plans
- 401(k) loans
- Family and friends
- Get the best deal on your plastic surgery loan
- The bottom line
What does plastic surgery cost?
Before you can set up financing for plastic surgery, it’s crucial to find out how much it costs. At the end of the day, the amount of money you need will depend on several factors – the procedure you hope to plan, where you live and the pricing of the doctor you choose to perform the procedure.
National average (2016)
Breast implant removals
Source: American Society of Plastic Surgeons/2016 Plastic Surgery Statistics Report
If you want averages, check out the ASPS report, which comes out annually and clocks national averages for certain procedures.
But because geography plays such an important role in the cost of medical procedures, you may find prices are much different when you start weighing the costs of a procedure in your area.
In that case, we’d suggest using this tool from the American Board of Cosmetic Surgery, which lets you see what procedures might cost based on your zip code. The organization also offers some of the best information to help you estimate the costs of the procedures you want.
For example, a tummy tuck in Indiana could cost $4,000 to $18,000 depending on where you live. Likewise, liposuction could cost $1,000 to $20,000 depending on your zip code and how much of the procedure you need performed.
A breast augmentation can range from $3,000 to $12,000 nationally as well. These wide ranges of pricing are why, ideally, you’ll want to get quotes for plastic surgery in your area before you nail down costs or set up financing.
Because costs vary so widely, Clint Haynes, a Kansas City-based financial adviser suggests getting three quotes from different doctors you’ve vetted in your area to ensure you’re getting the best deal. Obviously, paying less for a high-quality cosmetic procedure will let you take out a smaller loan, and that will make it easier to pay down your balance faster.
How to pay for plastic surgery
Once you have an idea how much your cosmetic procedure will cost, it’s smart to consider all the financing options available along with their advantages and disadvantages.
Of course, nothing beats paying in cash and walking away debt-free.
But if you’re determined to finance your procedure, you should at least know all of your options and the pros and cons.
Here are the main plastic surgery financing options available, along with how they work:
A personal loan is a type of loan that is unsecured. As a result, these loans don’t require collateral. Personal loans also come with fixed interest rates and a fixed term, meaning you’ll pay the same monthly payment for the life of the loan.
To qualify for a personal loan with the best terms and rates, you typically need good or excellent credit (a FICO score over 740), although some personal loan companies will approve you with a credit score as low as 580.
You’ll also need proof of ability to repay your loan (i.e. income) and a low debt-to-income ratio (ideally 36% or lower). It may be possible to qualify for a personal loan if you don’t need these requirements, however, and that’s especially true if you have a cosigner who has good credit and a solid income.
Pros and cons of personal loans
No collateral required. According to Dan Matysik, vice president of Discover Personal Loans, some of the main advantages of personal loans are in the way they are set up. The fact these loans are unsecured means you don’t have to put up collateral to qualify, and you can typically secure funds within the week and sometimes the next business day.
Fixed rates. Personal loans also have fixed interest rates, flexible repayment plans (usually 36-84 months) and typical loan amounts big enough to cover the costs of many plastic surgeries, notes Matysik.
Can help or hurt your credit. So long as you make on-time payments, you could see your credit score improve. But if you don’t keep up with your monthly payment, you’ll damage your credit score.
Spending beyond your means. Personal loans may make it easy to spend more than you can afford if you don’t have a budget in mind. Only borrow what you need and are sure you can pay off.
May carry fees. While many personal loans also have no fees over the life of the loan as long as you make your monthly payment on time, watch out for loans that carry origination fees or prepayment penalties (that’s a fee they charge if you pay off your loan early).
Medical credit card
Medical credit cards like Care Credit offer financing options for regular health care procedures as well as cosmetic procedures. This option works similarly to a personal loan in that you can borrow for a set length of time of up to 60 months.
To qualify for a medical credit card, requirements are similar to personal loans. You typically need good credit, proof of your ability to repay and a low debt-to-income ratio to qualify.
Pros and cons of using a medical credit cardThey can be a great deal so long as you can afford to pay them on time.
CareCredit does offer some pretty compelling 0% intro APR offers that would make your plastic surgery financing essentially free so long as you pay your balance in full before the promotional offer ends — but that’s the catch. You have to pay your balance in full before that promo period ends, or you could face deferred interest charges.
For example, CareCredit doesn’t charge interest on purchases of $200 or more if you select a repayment option of 6, 12, 18 or 24 months, and pay the amount due by the end of the promotional period. But if you don’t pay your entire bill off during that time, interest is charged from the original purchase date at a rate of 26.99% for new accounts.
Do the math. If you can only afford to make minimum payments, you may not be able to pay it off before that promo period ends. If that’s the case, you’re better off using a different financing option.
Credit cards are another plastic surgery financing option to consider. Unlike personal loans, however, credit cards come with variable interest rates and no fixed term, meaning your debt can be paid off quickly or slowly depending on how much you pay each month.
Another important factor to consider with credit cards is how much interest you’ll pay overall. While some cards offer 0% intro APR deals for up to 18 months, other credit cards come with higher revolving rates that can make repaying your balance more expensive.
Pros and cons of using a credit cardObviously, the biggest advantage of using a credit card comes when you are able to secure a 0% intro APR offer for purchases. If you are able to qualify for one of these offers, you’ll pay no interest for your card’s introductory offer, then your card’s standard variable interest rate thereafter. If you’re able to pay your balance off completely during the introductory offer, you could even pay zero interest altogether.
On the flip side, this doesn’t mean credit cards are always ideal. “Revolving debt has an unknown payoff date and, oftentimes has variable interest rates that can be higher than personal loan interest rates,” said Matysik. Because of this, credit cards in general can make overspending easy and may cause you to spiral into debt if you’re not careful.
Home equity loans or lines of credit
A home equity loan lets you borrow a fixed amount of money against the equity you have in your home. These fixed-rate installment loans let you pay fixed monthly payments for a set length of time – usually around 15 years. A home equity line of credit (HELOC), works similarly in the fact it lets you borrow against the equity in your home. However, these lines of credit are revolving, meaning there is no set loan amount, payment or payoff date. Also, HELOCs usually have variable (fluctuating) interest rates.
Pros and cons of using home equityYour home’s on the line. Because home equity loans and lines of credit are secured with your home, they usually feature lower interest rates and longer loan terms than personal loans. If you’re trying to save money on interest and pay the lowest monthly payment, this could be advantageous.
On the other hand, the fact you’re securing this loan with your home could spell trouble if you cannot repay your home equity loan. If you fall into default, you could potentially lose your home – a concept that seems troubling for any surgery, but especially a voluntary cosmetic procedure.
Also, as North Dakota financial advisor Benjamin Brandt points out, home equity loan interest is no longer tax-deductible due to the new tax laws in place in 2018. Further, you may not qualify for this type of loan unless you have considerable equity in your home.
It’s possible to refinance your home and take cash out provided you have enough equity in your property to do so. Let’s say you own a $300,000 home and owe only $200,000.
If you qualify for a cash-out refinance, you could refinance into a larger mortgage and take the difference out in cash. Typically, you’ll need good credit score, proof of income and a low debt-to-income ratio to qualify for a cash-out refinance with the lowest interest rate and best terms. Further, you can typically only take 80-90% of your established equity out as cash with this method.
Pros and cons of using home cash out refinancingAccording to Haynes, this option could be advantageous since a new mortgage might offer the lowest interest rate provided you have good credit. Once again, however, “you would be using home equity to pay for plastic surgery,” he said. “Unless it is a health emergency that isn’t covered under health insurance, I would not recommend it.”
Also, keep in mind that refinancing your home typically involves paying closing costs. Further, you’re also letting go of home equity you’ve worked hard to accrue and lengthening the amount of time if takes to pay off your mortgage with this option.
Since plastic surgery is typically voluntary and not emergent, taking the time to save up for your procedure is a smart idea. Just don’t drain your rainy day fund.
“As long as it is not emergency savings and not earmarked for another reason, this would be the logical choice to pay for plastic surgery,” said Haynes. Also keep in mind that if you don’t have the money saved up for plastic surgery now, you can always start saving monthly until you save up the amount you need to pay for your surgery in cash.
Pros and cons of using savingsThe main advantage of using savings to finance plastic surgery is that “you’re not going into debt,” said Haynes.
By saving up the cash ahead of time, you’ll never have to pay monthly payments or interest for your surgery. Of course, like Haynes said, you do have to make sure the savings you use for plastic surgery isn’t required for other important expenses in your life.
Doctor payment plans
Matysik notes that it may be possible to work out a payment plan or partial payment plan with your doctor. These arrangements can vary in detail and scope, however, so it’s best to check with your doctor’s financing office to see what options may be available.
Pros and cons of using doctor payment plansWhile the pros and cons of doctor payment plans depend on the details you agree on, there is one main disadvantage that comes with financing plastic surgery directly with your doctor – the fact you won’t build your credit score.
Since other financing options like personal loans and credit cards will report your monthly payments to the three credit reporting agencies – Equifax, Experian and TransUnion – they can help you build credit or improve your credit score over time if you use them responsibly.
It may be possible to borrow against your own 401(k) to cover the costs of plastic surgery. A 401(k) loan is taken directly out of your retirement plan balance, and you typically pay it back via automatic payroll deduction within five years or less.
Typically speaking, 401(k) loans allow you to borrow the lesser of $50,000 or 50% of your 401(k) balance.
Pros and cons of using a 401(k) loanThe main advantage of using a 401(k) loan is the fact you’re borrowing money you already have. Because of this, there is typically no credit check required to get a 401(k) loan. Interest rates may also be low, as the typical rate for these loans is the prime rate plus 1%.
But, there are notable disadvantages that come with using a 401(k) loan, including the fact that your spouse often has to sign for you to use them. Also, if you leave your job for any reason, the remaining balance is typically due within 60 days.
Last but not least, taking money out of your retirement account will likely set your retirement goals back, says Haynes. If the money isn’t there, it won’t grow. “There is opportunity cost since that money is no longer invested,” he said.
Jon Luskin, a financial planner with Define Financial is adamantly against borrowing against your retirement.
“The only time you should pull money out your 401(k) for plastic surgery is usually never,” he said. That’s because 401(k) plans “are absolutely fantastic because they offer tax-advantaged investment growth.” Options for getting tax-advantaged investment growth outside of your 401(k) are also limited, he says. So, ideally you’ll want to fund your account and keep funding it without taking cash out.
Family and friends
If none of these other financing options work, you could always borrow money from your family and friends if they are willing and able. Haynes says you’ll likely get a good interest rate this way, and you may be able to negotiate the exact repayment terms you want. Obviously, the details of this setup (monthly payments, interest rate, payoff date) will depend on what you negotiate on your own.
Pros and cons of borrowing from family and friendsWhile borrowing the money from someone you know might sound ideal, one big disadvantage that comes with this option is plain old guilt, says Haynes. Knowing that you actually borrowed money from a friend or family member for plastic surgery is a big downside, he says. And if you can’t pay it back for any reason, you could be putting your relationship on the line.
On the other hand, this option may be the only option for people who have bad credit and can’t qualify for other financing options.
Borrow what you can afford to repay. As with any type of loan, the key to borrowing responsibly is only borrowing what you know you can afford to pay back. Before you borrow, make sure you will have an affordable monthly payment you can easily cover along with a plan to cover your loan payments in both good times and bad.
And, if financial peril is even a question when it comes to plastic surgery, “then you can’t afford it,” said Haynes. If you are putting your ability to pay other bills or save for important goals on the line to cover a cosmetic procedure, then you should consider other options – or at least wait a while to think it through before you move forward.
If you’re even a little bit worried about what borrowing money could do to your finances in the future, it may also make sense to save money for plastic surgery for a while as you think it through.
Also it may be worth it to check in with the administrators at your doctor’s office, says Matysik, as “they may be able to offer you payment plans, financing options or other incentives and deals.” These benefits or options could decrease the overall amount you need to borrow, and should be factored into the loan amount you take out.
Get the best deal on your plastic surgery loan
Get quotes from doctors. We already mentioned Haynes’ suggestion of getting at least three quotes from doctors before you get plastic surgery. Getting multiple quotes can ensure you’re not overpaying while helping you borrow less overall.
Get quotes from lenders, too. Getting a lower interest rate and having the lowest fees possible attached can cost you a lot less in the long run, he says. This is why, in addition to getting multiple quotes for plastic surgery, you should also get more than one loan quote. By shopping around for the best loan with the lowest interest rate, you can make sure you’re getting the best deal you can qualify for.
Read the fine print. In addition to your loan amount, you can save by reading the fine print for fees, interest rates and other costs. “You want to focus on the full cost of the loan and account for additional fees, such as an origination fee,” said Matysik.
The bottom line
While borrowing money for voluntary procedures may never be ideal, there are times when you don’t have the cash for what you want. In these cases, your best bet is either saving up the money you need or at least making sure you’re borrowing smart.
“It’s only recommended to use one of these borrowing options if you have a plan to pay back the loan on time, in a way that works for your budget,” said Matysik.
If you can’t do that, well, you may be better off skipping plastic surgery loans altogether.