December 5, 2016
Over the years I have often written about the benefits, both to your practice and to your patients, of offering outsourced financial arrangements as a viable payment option for dental treatment. The practice receives full payment at the start of treatment, and the finance company assumes all of the risk for collecting the borrowed amount. For this valuable service, the finance company is paid a “merchants fee” by the dental practice. That merchants fee essentially underwrites the loan allowing the practice to offer interest-free promotional packages to patients.
Most of the time these arrangements work out seamlessly. But in a significant number of cases – more than you might expect – a massive PR problem occurs when a patient owes an outstanding balance at the end of the promotional period. Why does this happen? Because some of the major well-known finance companies – instead of sending monthly statements for the agreed-upon payment that will fully amortize the loan – deceptively send monthly statements saying “minimum payment due”. The patient is then billed an egregious interest rate – often in the 25% annual interest range – on the TOTAL amount of the original loan and not just on the outstanding balance.
This is referred to as retroactive interest. As you have probably experienced, patients are really upset when this happens to them. They are angry and even blame your office for offering the plan. That, of course, is not helpful for your reputation.
You might want to check out Lending Club Patient Solutions. The plans they offer are transparent and feature easy to understand terms with monthly payments paced to pay off within the promotional period. And these plans have no retroactive interest. If a patient does not pay off their balance within the promotional period, interest will only accrue on the outstanding balance on the date the payment plan ends and NOT from the date of the initial purchase. Lending Club also prides themselves on offering exceptional customer service. They answer the phone promptly, and the person who answers will be the one to guide you through the entire process.
Another feature I like is that your practice can tell Lending Club which interest free promotional packages you will offer. That way – if the patient doesn’t make arrangements in your office, but instead prefers to call from home – they can only be offered plans you have agreed to.
You can call Lending Club Patient Solutions at 800-630-1663 for more details. I will be interested in your feedback.
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