You and your partner have been trying to grow your family through adoption for a while now. You’re so excited to welcome a new little one into your home! But there’s no doubt about it – adoption is expensive.
It is mind-blowingly expensive. We’re talking about 20,000 to $50,000 in adoption costs when you add up all the fees, travel, and everything.
Keep reading to find out if a personal loan could help you become a parent.
Understanding Adoption Costs
When you and your partner first decided you wanted to adopt, you naively thought it would be like a few thousand dollars and that’s it. Boy were you wrong! Adopting a child ends up costing as much as buying a freakin’ house or something.
Here are some of the biggest expenses that surprised you:
- Agency fees – For private or international adoptions, you pay the agency tens of thousands for stuff like paperwork processing and counseling birth parents. You were quoted $15,000 to $20,000 just for their services!
- Legal fees – You definitely need an experienced adoption lawyer to deal with all the contracts, regulations, and legal stuff. Attorneys charge anywhere from $3,000 to $10,000 or more. Ouch!
- Travel costs – If you adopt domestically far from where you live or overseas, you’ll likely travel multiple times for required visits and appointments. Flights, hotels, rental cars, etc. can cost an easy $5,000-$10,000.
- Home study – To approve you to adopt, a social worker has to do a home study. That costs $2,000 to $4,000 even if you pass!
- Support after adoption – Post-adoption counseling services to help your new child adjust can ring up a tab of several thousand dollars too.
When you add up agency fees, legal bills, travel, the home study, and support after the placement, the total cost of adoption often lands between $20,000 and $50,000+.
Key Takeaway: Adopting involves big costs like agency fees, lawyers, travel, home studies, and support after placement. It often totals $20k to $40k.
What is a Personal Loan?
A personal loan gives you a lump of cash upfront that you pay back in installments over a set period of time. Interest rates, fees, terms, and eligibility differ between lenders.
Unlike credit cards, personal loans have fixed rates and monthly payments.
Loan amounts usually range from $1,000 – $100,000 and terms last 1-7 years.
People often use personal loans for:
- Major purchases
- Medical bills
- Paying off debt
- Home renovations
- Weddings
Personal loans require a credit check because your credit history determines your rate and eligibility.
Key Takeaway: With a personal loan, you get a lump cash sum upfront and repay it in fixed installments over 1-7 years, often for major expenses.
How Personal Loans Could Help Cover Adoption Costs
After learning the basics about personal loans, you could start to see how they might help you afford adoption:
- Fixed payments – Unlike credit cards with payments that fluctuate, personal loan payments stay the same each month, which helps a ton in budgeting and planning finances.
- Potentially lower interest – The best personal loan rates can actually be lower than average credit card interest rates, saving substantial money over the life of the loan.
- Borrow larger amounts – You can likely qualify for up to $100,000 with a personal loan, which would probably be enough to cover all your adoption costs. Other options don’t let you borrow as much.
- Consolidate costs – Rather than putting adoption expenses on multiple credit cards and juggling payments, one personal loan consolidates everything neatly into a single predictable monthly bill. Way simpler!
Key Takeaway: Personal loans allow fixed payments, may have lower interest rates than credit cards, let you borrow large amounts up to $100k, and consolidate multiple adoption expenses into one place – all useful benefits.
The Potential Downsides and Risks of Personal Loans
Even though personal loans seem helpful for adoption costs, you had to look into the potential downsides too. Loans don’t fix everything.
Here are a few risks to think hard about.
- Debt obligations – If the loan payment ends up being too big for your budget and income decreases, it could be difficult to make payments. Defaulting on a loan can seriously damage credit.
- Interest charges – Based on the loan’s interest rate and terms, the total interest fees can really add up over 5+ years of payments, increasing the overall cost.
- Credit score impacts – Just applying for a personal loan often requires a hard credit check. Too many checks in a short time can temporarily ding your credit score.
- Prepayment penalties – Some shady lenders charge big penalties if you try to pay off the loan faster than scheduled. That limits flexibility down the road.
Key Takeaway: Potential downsides of personal loans include unmanageable monthly payments, super high interest charges over time, credit score damage from applying, and prepayment penalties that limit flexibility. Risky!
Other Options Beyond Personal Loans for Funding Adoption
In addition to personal loans, you researched alternative ways you may be able to finance adoption costs:
- Grants and assistance – There are awesome nonprofits like Gift of Adoption that provide financial aid and grants if you qualify based on income limits and other criteria. This help is free – no strings attached!
- Fundraising – You have generous family/friends who may donate to an adoption fundraiser campaign on a site like GoFundMe. Every little bit helps.
- Tax credits – The federal adoption tax credit offers up to $15,950 in credits per child adopted. It helps recover some costs when tax season comes.
Key Takeaway: Besides personal loans, other options to fund adoption include grants, fundraising, employer benefits, tax credits, and specialized 0% financing programs through adoption organizations.
Final Thoughts
Adoption is great, but it definitely isn’t free.
Personal loans could help cover the costs through fixed payments, low rates, and large loan amounts. But they also come with risks like taking on debt or damaging your credit.
Therefore, keep pros and cons in mind. It allows you to make the best choice for financing your adoption journey.