1. Interest Rate is the most important aspect of total cost.

While interest rate certainly impacts the cost of financing, it is by no means the complete indicator. In fact, it’s not even close to being the most important element in assessing practice financing programs. Other key factors are down payment, the term length, and structure of the re-payment schedule — each every bit as important as the interest rate offered.

2. Graduated and Referral terms are necessary.

The most important thing to consider regarding these offers of structured re-payment terms is “What is the cost of deferring or paying reduced payments at the front end of the loan?” Many doctors are shocked to realize that despite making $100,000.00 of payments over the first three years of their loan they will often still owe more than the original amount borrowed!

3. 100% Financing is always preferable.

Not at all. This always depends on the personal financial situation of the borrower. Far too many doctors chase programs designed for new graduates and pay costs equal to opening their practice on a credit card — simply because there is a belief that 100% financing is always preferable. The 100% financing programs are designed for higher risk borrowers, and can come with a five to six figure premium. Plus, many include stipulations about pre-payment and other impediments.

4. The doctor is the lender’s client.

They should be but that is far from the case. Most of your “specialized dental lenders” are affiliated tightly with vendor partners. It should come as no surprise that many of the programs are designed for the benefit of those vendors and the doctor often becomes an inconvenient after-thought. Who referred the lender? Are the strongest attributes of your loan program designed to facilitate payment to the vendors?

5. Flat rates are always the best choice.

Flat rates must be considered in conjunction with the length of term and the rate differential at the beginning of the term. Often we see doctors who think they should pass on terms whose interest rate is more than 3% lower for the “comfort” of a fixed rate term.

Dental Wealth Partners has the experience and expertise to analyze what program best fits your practice, and is your best advocate when negotiating the best possible terms for any type of practice loan. Contact a representative today!