Adoption Loans and Grants

While it's far from ideal to borrow money for adoption, adoptive families may find that taking out an adoption loan is necessary to cover the large and immediate expenses. In some cases, adoptive families may be able to quickly pay back an adoption loan once they receive a tax credit or are reimbursed by an employer or the military. And in some instances, adoptive families may even be able to get an adoption grant to pursue their dreams of parenthood.

Adoptive families can get adoption loans and grants from: 

  • Home Equity Loans - Interest rates for home equity loans are often reasonable, and the interest is tax deductible. Just remember, you're putting your home at risk.

  • Insurance - You may be able to borrow from the cash value of your life insurance policy.

  • Low-Interest Loans - Some banks offer low-interest loans or credit lines for adoptive parents.

  • Private Grant and Special Loan Programs - Adoption loans, both home equity and unsecured, may be obtained through the National Adoption Foundation, which also awards grants to needy adoptive parents. Other organizations have sprung up in recent years to provide adoption grants, but some have been proven illegitimate or have been unable to carry on during the recession. Be sure to research these organizations. You can learn more at

  • Religious Organizations - Many churches and other religious organizations have made adoption part of their religious mission. Find out if your place of worship offers funds for families pursuing adoption.

  • Relatives - While mixing family and finances can be tricky, your relatives are likely some of the people who understand best how much you want to become parents.

  • Credit Cards - Credit cards are an easy source of cash but typically have high interest rates. *

  • Retirement Accounts - These accounts, such as 401(k)s and profit-sharing plans, usually offer lower interest rates than credit cards, but if you change or lose your job and cannot repay the loan quickly, it will become a taxable withdrawal. In addition to the income taxes you’ll have to pay on the withdrawal, you’ll also have to pay a 10 percent penalty if you are younger than 59.5 years of age. *

*Please Note: Most financial planners do not recommend that you tap these sources, unless it’s absolutely necessary.

The decision to take out a loan for adoption can be difficult and has serious consequences for your entire family. It's important for adoptive parents to maintain financial stability for the good of the child. Dipping into future retirement savings or running up credit card debt can add to your financial and family stress and may change your long-term planning and goals.

Before you take out an adoption loan, consider speaking with a financial planner or accountant to better assess your family’s financial situation and future.

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