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Get sexy without going bust

Jo Thornhill, Mail on Sunday
17 May 2004

HAIRDRESSER Rebecca English didn't feel comfortable asking her bank for a £4,000 loan - not because she is financially shy but because she wanted the money to pay for a breast enlargement operation. So to avoid awkward questions, she approached specialist finance company Medi-fi.

Rebecca, 23, was put in touch with Medi-fi by the Belvedere Clinic in south-east London after her consultation in March. Medi-fi's service was sensitive and efficient. 'I'm so thrilled with my operation,' says Rebecca. 'It's possible that I could have got the finance cheaper elsewhere, but I am completely happy with the service I had from Medi-fi.'

But in the same way that obtaining finance for a new car from a dealer is rarely the cheapest option, signing up with a specialist finance firm through a cosmetic surgery clinic may not offer the best value.

Rebecca, of Upper Belvedere, Kent, took out a five-year loan, and at £103 a month she effectively pays a high 19% a year.

Specialist companies have been quick to link with private clinics to finance the soaring demand for cosmetic procedures.

However, Richard Mason, a director at moneysupermarket.com, a website that compares loans from across the whole market, says it is important to shop around.

'Some specialist finance companies will get the best deal for an individual, but since they can introduce only a limited number of clients to each loan provider, they may not always be able to secure the lowest rates,' he says.

'There are thousands of loans available and consumers may miss out if they opt for the first deal they are offered without comparing rates.'

Mason says that almost all lenders will lend for cosmetic surgery and that someone of Rebecca's age and occupation should not have had a problem obtaining a loan at 6.5%. At this rate, her monthly repayments would have been only £78.

Medi-fi's lowest rate is 6.7% and the company says about 30% of applicants are offered this. It says Rebecca's high rate is because she has no credit history, so the risk was difficult to price.

First Medical Loans is a specialist broker based in Leeds that offers finance for cosmetic procedures.

Spokesman Alan Johnson says the typical rate a customer with a sound credit record would pay is 8%. 'We aim to obtain the lowest rates from our panel of lenders based on an applicant's credit record and ability to pay,' he says, 'so it is unlikely that most customers will get a better deal elsewhere.'

Daniel Joy, chief executive of Nottingham-based Medi-fi, says the benefits of a specialist company go beyond just the price of the finance. 'With Medi-fi, patients get an expert who will treat their application for finance sensitively,' he says. 'Often, if you go into a bank to ask for finance to fund cosmetic surgery, you will be asked a lot of awkward questions. However, with us this is not the case.'

At least four other loan providers offer 6.7% or lower on a loan of £4,000. Lombard Direct, for example, will offer those with a good credit history loans from £ 2,000 at 6.1% if they apply online. Alliance & Leicester last week lowered its personal loan rate to 5.9% for loans of £7,500 and over.