Adoption Loans: The Complete Guide

Posted by in Loans | Updated on May 30, 2023
At a Glance: There are several options for financing an adoption, including personal loans, personal lines of credit, and home equity loans. There are also alternatives to loans, such as grants and zero-interest loans, that prospective adoptive parents can take advantage of.

Adoption is a way for families to become complete while making sure a child goes into a loving environment. However, it is a very pricey process. For this reason, many couples either give up on the idea or postpone it until further notice. But there are ways to get over the money obstacle and adopt a child so that your family is complete – adoption loans.

Every year, there are around 135,000 children adopted in the U.S. Some of them were adopted through an adoption loan – a solution that saved the parents who were so eager to have a child. But there are a lot of things to know about this type of funding before applying for it. So, if you wish to adopt but you cannot cover the costs out of pocket, here are a few things you should know about adoption loans.

Are There Loans for Adoptions?

Adoptions are expensive. The price is perhaps the main obstacle that people encounter when they hope to adopt a child. Most families who adopt children have the money necessary for the process, but others are less fortunate. Lack of money doesn’t erase the desire to become an adoptive parent, though, so many Americans look for funding options to afford the adoption costs.

Luckily, there are loans for adoptions. This is one of the most common ways to get money to finance child adoption. People can obtain funding from various financial institutions, with each loan being unique and carrying different terms and conditions.

Now, sure, taking out money for adoption is not always the best option for some families, but it could help cover larger expenses related to this process.

When you take out an adoption loan, the lender will generally look at your savings, credit, liabilities, assets, and others in order to figure out the amount that is perfect for you. Not only that, but the lender will also use these aspects to determine the interest rate and loan duration. In the end, what loan you have access to will be influenced by your situation.

Before someone takes out an adoption loan, though, they must keep in mind that it can take years to pay it off. In other cases, it may be possible to pay it off quicker, particularly when the parents are reimbursed by the military or the employer or when they get a tax credit.

3 Ways to Finance an Adoption

Typically, there are 3 different ways to finance an adoption. Each one can be more convenient than the other based on the individual’s options and needs, but they all come with a set of downsides.

Personal Loans

One of the most common ways to finance an adoption is by taking out a personal loan. This is easy to apply for: all you have to do is complete an application and submit it to your bank or a credit union. It might also be possible to apply for a loan online.

Some options give you no-interest or low-interest loans. These come from organizations that are supportive of children’s adoption, such as the Lifesong for Orphans, A Child Waits Foundation, and Oxford Adoption Foundation.

Although paying no interest or very little interest is great, you should know that these loans may be smaller. So, they may not be enough to cover the full adoption-related costs.

If you don’t want to pledge anything as collateral for the loan, you can find organizations and banks that will give you unsecured adoption loans. However, these loans may bring higher interest.

Personal Lines of Credit

Another thing you can do is apply for a personal line of credit. This type of funding will work similarly to a credit card. You will be able to take money out for your adoption without having to pledge your car, house, or any other property for it.

Also, if you have a retirement account such as a 401(k), you may have the option to borrow money from it and use it for the adoption process. There is a maximum amount set by the IRS, though. Generally, you will be able to borrow only up to 50% of the vested balance. You can’t borrow more than that or $50,000. But if 50% of the vested amount is below $10,000, you may be able to borrow up to that amount depending on the plan.

What’s great is that these loans are suitable when you cannot choose other funding options, or when you do not need money for all the adoption-related costs. The loan will be paid back in five years through quarterly payments.

But you should know that this funding type can not only decrease the sum you save for retirement but will also require excellent credit and an established relationship with a lender.

Home Equity Loans

Home equity loans are great for those who own a home. There is a borrowing limit, but if you do not exceed it, you will be able to borrow money several times whenever you need it for adoption costs. During the draw period, you will be able to start making minimum payments.

You can’t borrow more after the draw period ends. You can start paying back the amount during a repayment period, while some HELOCs require you to pay the money back immediately.

Difference Between Adoptions Grants and Loans

People who are looking for adoption funds may stumble upon loans and grants, and not know what makes each unique.

In essence, they both offer funding for adoption. But unlike loans, grants do not have to be paid back. It’ll be just like receiving a gift – you get the money and use it as you wish, without worrying about debt.

Interest-Free Adoption Loan Options

If you want to get an adoption loan and are looking for something free of interest, there are a few options for you. These are:

The International Association of Jewish Free Loans offers loans free of interest for families in need, and it only takes 7-10 days for the applications to be processed. It doesn’t matter what your faith is, as it won’t affect your chances of success.

The Hebrew Free Loan Association is also great for Jewish faith adoptive families – they offer loans up to $15,000.

There is also the ABBA Fund, which gives Christian families interest-free funding for adoption. It takes 6-8 weeks to be approved.

5 Lenders that Give Adoptions Loans

Looking for adoption loans? Here are some great lenders for them:


Upstart provides low interest rates and high loan amounts for adoptive families in need. You just need a good credit score.


If your credit score is not the best, you should consider Avant. Its customer service is exemplary and there are no fixed rates or repayment fees. It may have high interest, though.


SoFi has fixed interest rates, which is why many individuals choose it for adoption loans. On top of that, the application process is easy.

Best Egg

With Best Egg, you can get personal loans between $2,000 and $50,000, which is great when you need smaller amounts of money for the adoption process. Your credit score is not affected either.


LendingClub is a great choice for individuals who want a personal loan but can only obtain one with a cosigner. You can borrow loans with a 3-5 year term and get between $1,000 and $40,000.

Alternative Financing for Adoptions

Do you need money for adoption but don’t want to go for a loan? Here are some alternatives:

  • Consider a grant. There are various adoption organizations that offer grants to families.
  • Use a crowdfunding platform for a fundraiser. GoFundMe is one of the most popular ones, but AdoptTogether is also great.
  • If your employer has adoption benefits, use them.
  • Don’t adopt through private adoption agencies – consider a foster care child instead, as it’s a more affordable option.

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Final Thoughts

When you cannot afford to pay for an adoption, you can consider an adoption loan. It’s easy to get access to funds and pay for the costly adoption process so that you can become a wholesome family.