Everything you need to know about adoption loans

Deciding to grow your family through adoption is exciting, but it can also be expensive. Adoption-related expenses vary widely depending on whether you're adopting a child from foster care, going through a private agency or adopting internationally.

Adopting a child from foster care involves very little expense because federal and state adoption assistance programs help offset costs. But a private adoption can cost anywhere from $20,000 to $45,000, and an intercountry adoption averages between $20,000 and $50,000, according to the Child Welfare Information Gateway.

Fortunately, adoption loans can help you finance these costs. Here’s what you need to know about adoption loans.

• Can I get a loan to finance an adoption?
• Lenders that offer adoption loans
• Interest-free adoption loans
• What’s the difference between adoption loans and grants?
• What are some adoption loan alternatives?

Can I get a loan to finance an adoption?

In short, yes. Many prospective parents turn to adoption loans to help pay for the cost of adoption. In fact, adoption loans come in several different forms. Some lenders offer loans specifically for adoption. But you may also be able to use a personal loan to finance your adoption costs.

Lenders that offer adoption loans

Personal loans can be a good option for financing the costs of adopting a child. With an adoption loan, lenders will typically cover attorney fees, legal and court fees, home studies, and medical and travel expenses.

Achieve (formerly FreedomPlus)

• Loan amounts: $10,000 to $50,000
• Loan terms: 2 to 5 years
• Best for: Borrowers who want to choose their own payment date

Avant

• Loan amounts: $2,000 to $35,000
• Loan terms: 2 to 5 years
• Best for: Borrowers with poor or fair credit

Axos

• Loan amounts: $10,000 to $50,000
• Loan terms: 1 to 5 years
• Best for: Borrowers with good to excellent credit

Best Egg

• Loan amounts: $2,000 to $50,000
• Loan terms: 2 to 5 years
• Best for: Borrowers with lower income and fair credit

Discover

• Loan amounts: $2,500 to $35,000
• Loan terms: 3 to 7 years
• Best for: Borrowers who want fast funding

LendingClub

• Loan amounts: $1,000 to $40,000
• Loan terms: 3 or 5 years
• Best for: Borrowers with a strong credit score and low debt-to-income ratio

LendingPoint

• Loan amounts: $2,000 to $36,500
• Loan terms: 2 to 6 years
• Best for: Borrowers with fair credit

LightStream

• Loan amounts: $5,000 to $100,000
• Loan terms: 2 to 7 years
• Best for: Borrowers who want longer repayment terms

Marcus

• Loan amounts: $3,500 to $40,000
• Loan terms: 3 to 7 years
• Best for: Borrowers who want tailored monthly payments

Prosper

• Loan amounts: $2,000 to $50,000
• Loan terms: 3 to 5 years
• Best for: Borrowers who want to pay off their loan early

SoFi

• Loan amounts: $5,000 to $100,000
• Loan terms: 2 to 7 years
• Best for: Borrowers with excellent credit

Upgrade

• Loan amounts: $1,000 to $50,000
• Loan terms: 2 to 6 years
• Best for: Borrowers who are building credit

Upstart

• Loan amounts: $1,000 to $50,000
• Loan terms: 3 to 5 years
• Best for: Borrowers who don’t have strong credit but have an excellent education or job history

Interest-free adoption loans

Some nonprofits and religious organizations offer interest-free adoption loans to adoptive families who meet their criteria. Here are a few options to consider:

• ABBA Fund — The ABBA Fund offers loans designed to cover up to one-third of the overall cost of an adoption, usually in the range of $6,000 to $8,000. Application approval for a zero-interest adoption loan takes six to eight weeks.
• Hebrew Free Loan — Hebrew Free Loan is a nonprofit organization that provides interest-free loans of up to $20,000 to help Jewish individuals and couples in Northern California cover the cost of adoption. To qualify, you must be a Jewish resident of Northern California or working for a Jewish organization in Northern California.
• Lifesong for Orphans — Lifesong for Orphans provides no-interest loans only to traditional two-parent Christian families who are U.S. citizens. The application review process takes four to six weeks.
• Pathways for Little Feet — Pathways for Little Feet provides interest-free loans of up to $8,000. Priority is given to families with the greatest financial need. Applicants must work with a licensed adoption agency.

If you don’t qualify for one of these adoption loans, you can compare personal loan rates for adoption expenses using Credible.

What's the difference between adoption loans and grants?

Both adoption loans and grants offer funds to help adoptive parents cover the cost of adoptions, but there’s a crucial difference: Adoption loans must be paid back, whereas adoption grants are gifts that don’t have to be repaid.

Because they don’t have to be repaid, there can be a lot of competition for adoption grant resources. It’s a good idea to apply for a variety of adoption grants to improve your chances of getting some financial assistance.

Here are a couple adoption grants to consider:

• Gift of Adoption Fund — The Gift of Adoption Fund offers grants of up to $15,000 to help individuals complete a relative, domestic, or international adoption. Grants are awarded without regard to race, religion, age, marital status or sexual orientation. Applicants must submit two letters of reference and a $50 application fee with their completed application.
• HelpUsAdopt.org — HelpUsAdopt.org provides adoption grants between $500 and $15,000 to couples and individuals regardless of race, religion, gender, ethnicity, marital status or sexual orientation. At least one applicant must be a U.S. citizen, and applicants must use a licensed adoption agency in the U.S. The organization prioritizes applicants without children or with failed or disrupted adoption placements.

If you’re unable to get an adoption grant, here are adoption loans to consider:

• Best Egg Baby & Adoption Loan — Best Egg provides adoption loans for up to $50,000 and funding as soon as one business day. The Best Egg adoption loan covers expenses such as medical treatments, hospital fees and legal fees associated with adopting a child.
• LightStream Adoption Loan — LightStream offers adoption loans from $5,000 to $100,000 with no fees or prepayment penalties. You don’t need collateral for a LightStream adoption loan, and there are no appraisals or home equity requirements.

What are some adoption loan alternatives?

Adoption loans and grants aren’t the only options for financing your adoption costs. Here are some alternatives to consider:

• Cash-out refinance — With a cash-out refinance, you refinance your existing mortgage with a larger loan and get the difference between the two loans in cash. In general, you need a credit score of at least 620 and a maximum combined loan-to-value ratio of 80% to qualify for a cash-out refinance. This means after your cash-out refinance, you still have at least 20% equity in your home.
• Personal line of credit — A personal line of credit is similar to a credit card — it’s revolving credit that you can continually draw from up to your borrowing limit. As you pay down your balance, your available credit is replenished. Interest rates on personal lines of credit can be lower than credit card interest rates, but are generally higher than home equity borrowing options, because personal lines of credit are typically unsecured.
• Home equity loan — A home equity loan is also known as a second mortgage. You keep your existing mortgage but borrow against your home’s equity in a one-time event. Home equity loans usually have fixed interest rates, so if interest rates rise, your monthly payment won’t be affected.
• Borrow money from friends or family — Friends and family may be willing and able to help you finance the cost of adoption. If you go this route, be sure to have a written loan agreement in place and pay what the IRS considers an "adequate" interest rate. Otherwise, both you and your friend or family member could face income tax consequences. As long as your family member charges at least the applicable federal rate in place at the time the loan agreement is signed, you don’t have to worry about tricky tax rules.
• Crowdfunding — Crowdfunding allows you to raise funds for your adoption journey from friends, family members, and even strangers. You simply create a profile on a crowdfunding platform, share your story and a link to contribute via email and social media, and people can donate to help cover your adoption costs. Some popular crowdfunding sites include GoFundMe and AdoptTogether.org.