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What You Need to Know About Adoption Loans

And How Some Families Turn to Loans to Afford Adoption

Many families considering adoption are in financially stable situations, yet still find themselves coming up short when faced with the cost of the adoption process. This is understandable — adoption can be expensive. The average American family’s savings account isn’t able to cover the full cost of adoption fees and other expenses. So, what do you do?

This is the greatest obstacle for many hopeful adoptive parents. But, through determination and hard work, many families are able to overcome this obstacle. Over more than 25 years of working with families, American Adoptions has seen families get creative and find a variety ways to cover the cost of adoption. One of the most common methods of adoption financing is adoption loans.

Loans for adoption come in all different packages. They are given out by a wide array of financial institutions and include varying terms and conditions. Deciding whether or not to seek out an adoption loans program is very personal. What is your financial situation? Will you be able to make timely payments on an adoption loan? Is this fiscally responsible for you? These are all questions that need to be asked, and only you can answer them for your unique situation.

As you find answers to these questions and research possibilities, it helps to know what’s out there. The type of adoption loans available might determine whether or not taking one out is a good idea for you. This article shouldn’t be taken as financial advice, but it can be a helpful resource for your research on adoption loans.

The following information focuses on loans for adoption, however, if you're a prospective birth mother searching for information about adoption costs and financial assistance, you can check out our complete guide here. You can also fill out this online form to speak to an adoption professional today.

Can I Get a Loan for Adoption?

While it's not always 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 of the process. The type of adoption loan you can receive will depend on your financial situation. Adoption loan programs will look at your credit, assets, liabilities, savings and more to determine what you may qualify for. The terms on the loan — like the amount loaned, interest rate and the length of the loan — will also depend on these factors.

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. In other instances, it can take several years to pay off a loan for adoption.

Here are some of the most popular types of adoption loans and adoption loan programs.

  • Home Equity Loans: It’s fairly common to take out a home equity loan to help cover the costs of the adoption process. There are pros to this plan — interest rates for home equity loans are often reasonable, and the interest is tax-deductible. There are also cons. A home equity loan, even in a good financial situation, can carry a high risk.

  • SoFi: SoFi is a popular personal loan service that some families turn to for adoption loans. It offers fixed interest rates, which can prevent a loan from becoming much more expensive than anticipated. SoFi has also created a user-friendly experience in their online application process and payment options.

  • LightStream: LightStream is a division of Sun Trust Bank that offers low-interest adoption loans. Most of their loans begin with interest rate options lower than 5 percent if paid in the shortest time period available (24 -36 months). Interest rates increase with the length of the loan, which means being prepared to pay off the loan quickly can save you a lot of money.

  • Prosper Healthcare Lending: For many years, Prosper was the preferred lender for hopeful adoptive families, and it's certainly still an option. They provide unsecured loans to individuals, with potential options to secure the loan. When you contact Prosper, remember use our provider number (003296). 

  • Abba Fund: This faith-based organization offers interest-free adoption loans to qualified couples. Many families have worked with Abba Fund and had a great experience. However, there are some concerns with the way Abba Fund structures its agreements. It is unconventional, to say the least. Consult a finance professional before applying. 

  • USAA: USAA offers personal loans with funds available the day after approval. You can apply online and, according to USAA’s site, receive “instant decisions in most cases.”

  • Credit Cards: Using a credit card as a loan device is not advised by almost all professional financial planners. However, it is included here because some families do choose to put adoption expenses on a credit card and then pay those purchases off later. Credit cards can have higher interest rates than standard personal loans, and credit card debt can be crippling. If at all possible, finding an alternative adoption loan is preferred.   

The Difference Between Adoption Grants and Loans

When you are researching adoption loans, you will likely also come across adoption grants. These two things serve basically the same function: an adoptive family needs extra funds, and both provide those funds. There is, however, a key distinction between adoption grants and loans. Adoption loans, like those listed above, have to be paid back. Adoption grants are like gifts, and they do not have to be paid back. This is why many hopeful adoptive families will apply to a variety of foundations that award adoption grants. They provide the same financial support as adoption loans without incurring the financial risk of a loan.

A Word of Caution About Adoption Loans

Adoption loans can be incredibly helpful. Many families have found them to be necessary in covering the cost of adoption and have had good experiences with the adoption loan program they worked with. However, this is a financial decision that can’t be taken lightly. Taking out an adoption loan is a significant choice. Many financial planners do not recommend that you turn to these sources unless it’s absolutely necessary. Before taking out an adoption loan, it is highly recommended that you speak with an unbiased financial professional who can evaluate the terms of the deal and the likelihood that this will be a good financial decision in your situation.

If you’d like to learn more about how families afford the cost of adoption from the perspective of an adoption professional, request more free information online.

Information available through these links is the sole property of the companies and organizations listed therein. America Adoptions, Inc. provides this information as a courtesy and is in no way responsible for its content or accuracy.

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Frequently Asked Questions

Do we need to retain our own attorney?

No, American Adoptions has established relationships with some of the best adoption attorneys in the nation. Because adoption laws vary from state to state and between counties, it is important to utilize the services of an adoption attorney who specializes in the state where the adoption will finalize, which is unknown until you match with an expectant mother. You have the right to retain your own attorney, but doing so may be an additional, unnecessary expense.

Can we choose the gender of our baby?

American Adoptions does not allow gender specificity in adoption. Any family who wishes to be gender-specific in their adoption should contact us at 1-800-ADOPTION and ask about the possibility of an exception waiver before taking any other steps toward adoption with our agency. Any families who do receive an exception to be gender-specific may also incur an additional fee, which helps cover the additional advertising costs of such a request.

Please note that gender specificity will likely increase your wait time significantly.

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