paying the bill for beauty

Footing the beauty bill for beauty

The decision to go ahead with a cosmetic procedure is a big one, fraught with all sorts of emotional and logistical considerations. But once you’ve decided to go for it, another big question looms: How are you going to pay for it?  If you don’t have the cash to pay for your procedure outright, there are several ways to finance that nose job you’ve been longing for or that tummy tuck you promised yourself you’d get after having kids.

Here’s a look at four common ways to finance your cosmetic procedure:

1.  Private financing company

Private financing companies can be an appealing option for patients who don’t want to use up their line of credit with their financial institution or the available credit on their credit card, according to Ann Kaplan, president and CEO of iFinance Canada Inc., which owns Medicard. “They want to keep that line of credit for other needs,” she says.  There are several different private financing companies, but, Medicard, which has been in business for 20 years, enjoys the largest market share in Canada, explains Kaplan. With a private financing company, the funds are paid upfront to the cosmetic surgeon and the patient then pays the financing company through monthly payments. The cost of borrowing will vary, depending on the patient. According to Kaplan, Medicard’s cost of borrowing starts at zero per cent and goes up to 22.95 per cent.

Pros of this financing option

• Patients can get financing on the spot

• Viable option for patients who may not be able to get a line of credit with a bank

• Generally less expensive than using a credit card

Cons of this financing option

• Generally more expensive than a line of credit with a financial institution

2.  Loan from Family or Friends

It may seem like a no-brainer to ask a family member or friend to spot you some money. And though it may work out brilliantly in some cases, Kaplan cautions that there are some situations where this may not be a wise idea.  “The worst loans are when someone co-signs for a girlfriend and then they break up,” she says. “They’re still liable, but they’re not with that person anymore.”  Plastic surgeon Dr. Michael Kreidstein, MD, MSc, FRCS(C), says he has encountered such situations. “I see that, and we try to insulate ourselves from it a little bit because we’ve been stuck in that kind of situation,” he says.

Pros of this financing option

•   With family members or friends, you can often agree on terms that will work for you
•   In most cases, this should be less expensive than other financing options

Cons of this financing option

•   Borrowing money from friends or family can complicate the relationship, especially if you have difficulty making a payment

•  Potential issues may arise if the relationship dissolves over the terms of the loan

3.  Credit Card

Paying for cosmetic surgery with a credit card will usually be the most expensive option. If you put a large sum of money on your card for a procedure and plan to pay it off over a long period of time, Kaplan recommends speaking with your credit card company to try to negotiate a better interest rate.

Pros of this financing option

•        Many credit cards offer rewards programs (e.g. points for flights, cash back, etc), so using this payment method can allow you to rack up points or other rewards.

Cons of this financing option

•        Putting a large sum on your credit card for a cosmetic procedure can tie up your credit line if you’re unable to pay it off promptly

•        As the saying goes, if you can’t pay for it, should you really be buying it?

4.  Bank Loan

There are two types of loans you can get from your bank: a secured or unsecured loan. A secured loan is backed by the security of your assets, generally giving you a higher borrowing amount and lower interest rate. While unsecured loans have faster approvals and require less paperwork, they are usually harder to obtain because a better credit score is required.  “Still, a line of credit is generally a cheaper option,” says Kaplan.

Pros of this financing option

• Lower interest rate than a credit card

Cons of this financing option

• With a secured loan, the approval process usually takes longer than for an unsecured loan because the collateral must be processed and verified

• If you obtain a secured loan and are unable to make the payments, you risk losing the collateral