Ten million people spent $12 billion in 2014 for some type of cosmetic procedure, according to the American Society for Aesthetic Plastic Surgeons (ASAPS). Americans borrow for everything else in our lives: homes, autos, education, vacations, and expensive wardrobes. We want to preserve youth and vibrancy. Why not get financing for our cosmetic surgery? 

The surgery and physician fees for many popular procedures, are expensive: eyelid lift, $2,700; liposuction, $2,800; breast augmentation (with silicon implants), $3,600; breast lift, $4,174; and tummy tuck, $5,400. (These figures, by the way, do not take into account charges for surgical facility, anesthesia, medical tests, prescriptions, garments and some other costs related to surgery; you may still get hit with ancillary charges.) Medical insurance typically pays only for reconstructive surgery after an accident or for some form of disfiguring illness, but never for an elective cosmetic procedure. Those seeking elective cosmetic surgery – more than 90% are women – must manage the cost on their own. Pay for it yourself or borrow. 

Consider Your Options – And Risks

Generally, there are five avenues to pursue, all with degrees of risk that the borrower should understand, says Vernon Bartle, CPA and a Certified Forensics Accountant, based in northern California.  “Let the buyer beware is no empty cliché. I have seen many people get themselves into serious financial jeopardy after failing to beware of inherent risks.”

The first thing Bartle tells any client inquiring about cosmetic surgery is that it is not tax deductible. (A tax exception might conceivably be made for some performers because their appearance is necessary for their livelihood. But we’re not in show business.) Bartle ranks five sources of financing cosmetic surgery, from most to least cost and risk, as: (1) physician or medical corporation’s payment plan; (2) medical and conventional credit cards; (3) collateralized institutional loans; (4) family or personal gifts; and (5) borrowing from your 401(k) (if allowed).

Sure, Check Your Doc's Plan, But Shop Around Too

Physician payment plans have the highest fees and interest, close to 25%, which are higher than conventional credit cards at 18 to 20%. “These payment plans offer teasers of no fees and minimal interest for six months to a year. But if you miss or are just late making a payment, you can be liable for the interest at the higher rate or incur a substantial penalty fee based on your balance,” Bartle says. A typical penalty fee can be 20 to 30%.

Medical credit cards are a recent entry into financing the burgeoning market of elective cosmetic surgery, and they function much like a conventional credit card, except they can be used only for medical expenses. The interest and fees may be slightly higher, Bartle says, but more of a concern to the average person are the long-term costs of high interest and penalty fees that occur when a large balance hamstrings your personal credit and diminishes your credit utilization score.

Keep An Eye On Your Credit Scores

“A credit score is calculated based on one’s credit utilization ratio,” Bartle explains. “You take the total credit available to a borrower and compare that to the amount of credit being used. Having little debt but a lot of credit available represents a low ratio and generates a good credit score. Conversely, lots of debt with little credit available means a high ratio and a bad credit score.”  If using credit cards, medical or otherwise, to pay for cosmetic surgery, be certain you can manage the payments, be certain to make the payments, and don’t let the balance soak-up most of the available credit on your credit cards. (You may be interested in 6 Benefits Of Increasing Your Credit Card Limit and Transferring Credit Card Balances To A New Card.)

You Could Tap Home Equity

Collateralized institutional loans, typically on a home, provide the borrower a tax-deductible benefit on the interest, like a home mortgage. “But the interest is deductible only up to $1.1 million of the property’s value. Many in northern California chafe on that one, but that’s the allowable limit,” Bartle says. “Beyond that, the interest is not deductible.”  Of course before approving such a loan, a financial institution is going to review your income, your home mortgage debt, your other debts and the current economic conditions (Is the housing market good or bad right now?). If an institution approves your loan, congratulations; but know that you risk losing your home or whatever item is used for collateral if you default. Can you afford to replace it? 

Gifts from loved ones or close friends are always an option. For the receiver, a gift is not taxable. Finding the courage simply to ask for such a gift may prove harder than the procedure itself. 

The Lowest Risk – In The Short Term

One last option is borrowing from your 401(k), if you have one through an employer and if the particular plan allows loans. Most do. You are in fact borrowing from and paying yourself back. There are no penalties if you miss a payment. “This is the best way to go,” Bartle advises. Aside from the obvious risk of borrowing from your future retirement funds, the only downside, he cautions, is if you leave your employer before you pay back the money: “Then the loan must be paid in full or it becomes taxable.”

The Bottom Line

When weighing your options, common sense – as we all know – should prevail. Be realistic about what you can afford, research your loan options and terms of financing, seek out advice and referrals on the best surgeon for your procedure, always read the fine print of any contract you sign, and instill the discipline to make your payments. Most of all: Be certain you’ll want to say "yes" if you’re ever asked "Was it worth it?"

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