Patient Financing in Dentistry: Internal or
Third Party?

While stories of your grandparent’s town dentist letting folks pay over time are common, the rise of third-party patient financing options have contributed to a decline in practice-managed payment plans. But are third-party financing options truly better? Let’s take a deeper look to find out.

Pros and Cons of Third Party Dental Financing

Pros of Third Party Patient Financing

  • No risk

    Financing companies take the risk of the transaction from the practice, so that offices don’t need to do their own risk management.

  • Up-front funding

    Rather than get paid over the course of the payment plans, most financing companies will pay your practice up front.

  • Simple management

    Financing companies offload the managerial tasks associated with collections

Cons of Third Party Patient Financing

  • Cost

    Third-party financing products are expensive to the practice and can also be costly to consumers.  Most practices don't realize that they could significantly improve margins by migrating patients to an internal payment plan.

  • Loss of control

    Working with third party lenders means giving up control.  Your practice has very limited control whether a patient is approved, what the terms of the loan are, and what the experience of working with a lender is like for the patient.  A patient can have a poor experience with a lender that reflects badly on the practice.

The Verdict

Ultimately, both third party financing and internal payment plans have a place in your practice, but you should be careful about what you use and when.

Use third party dental financing if…

…it’s a new patient

…the total value of the treatment is very high (generally $3k+)

…the patient asks for it


Use an internal an payment plan if…

…you have a long term relationship with the patient

…the total value of the treatment is low (generally less than $3k)

…you can recover your costs quickly

Software tools like FeatherPay can help simplify the way your practice handles both third-party financing tools and internal payment plans, so that your organization can improve profitability, reduce your operational costs and manage your risk — all while delivering a great experience to your patients.  FeatherPay is a payment platform that consolidates all the different ways a practice enables their patients to pay into a single experience for patients and administrators.  FeatherPay has detailed controls to help dental practices manage their financial risk and make administration easy.

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