Table of Contents

    Best Adoption Loans In 2020

    Adoption loans

    Adopting a child is a once in a lifetime decision. Most families plan adoption when they are financially stable, yet the calculated costs don’t measure up to the actual costs. Yes, there are many grants and other fundraising options at hand, but the easiest and most recommended way is considering an adoption loan.

    It is just like a personal loan, but for adoption purposes. On average, borrowers enjoy lower interest rates, tax exemptions, employer benefits, and much more with most of the adoption loan programs available. Still, before you apply, you should know about the best adoption loans available along with their relevant advantages and disadvantages.

    What Is An Adoption Loan?

    An adoption loan is basically a personal loan that you can take for covering expenses involved with child adoption. There are plenty of lenders in the market and most offer zero or low interest rates along with flexible repayment options. Some lenders don’t even charge origination or processing fees.

    It is an affordable funding solution for families seeking to grow their families by adopting a child. Please note that the offered rates vary by lender, hence you must shop around until you find the perfect option.

    Should You Use An Adoption Loan?

    Opting for an adoption loan is at your discretion. On average, families need to prepare to spend between $20,000 to $45,000 or more for adopting a child. International and embryo adoption costs can be even higher depending on the country. On the other hand, the cost of foster care adoption is significantly lower.

    That said, not everyone needs an adoption loan. If you are stuck on deciding if this is the right choice, here are some points to consider:

    • Plan in advance - Ideally, families plan adoption when they have financial stability and can bear the major expenses on their own. Consider the amount you need, then compare and calculate the total charges before deciding.
    • Consider affordability - You must have a clear discussion with the lender to understand the fees involved. You should also review the payment terms and other penalties on prepayment or missed payments.
    • Don’t fall for click-bait - You must understand that the annual percentage rate and approval depend on your income, credit history, and a lot of other factors. If you think that you meet all the criteria, then you should proceed.
    • Check for alternatives - If you need a relatively small amount to cover the adoption expenses, you should check for other simpler alternatives that ensure quicker approval and processing of funds.

    Our Picks for Adoption Loans

    • Amin. fee: 1.5% - 6%.
    • Annual income of $30,000
    • Min credit score of 600
    • Accept Co-signers
    • Hardship plans
    • Credit health tool
    • No fees
    • Low interest rate
    • Fixed Rates
    • Min credit score of 680
    • Unemployment protection
    • SoFi member benefits
    • Administrative fee: 4.75%
    • Annual income of $20,000
    • Min credit score of 580
    • Failed payment fee: $15
    • Day of Grace: 10 days
    • Grace period fee: $25

    Advantages And Disadvantages Of Adoption Loans

    Adoption loans are eligible for lower interest rates, but the approval criteria are stringent. There’s a long list of documents and proofs that need to be furnished. Most importantly, borrowers who have a good credit score have higher chances of approval.


    • Extremely low rate of interest
    • Flexible repayment options
    • Tax exemptions and employee benefits


    • Strict eligibility requirements
    • Slower approval process

    How To Qualify For An Adoption Loan?

    Bear in mind that getting a loan to fund an adoption means that you need a strong credit history. At the very least, it will help ensure a higher probability of your application being approved. A lot of lenders solely depend on the credit score as there is no collateral in an adoption loan unless a borrower applies for another alternative.

    To qualify make sure you know the required credit score. Next, you’ll need to gather all the required documents like:

    1. A Social Security Number (SSN)
    2. Proof of identity
    3.  Proof of address
    4. Income and expenses record
    5. Credit history
    6. Other relevant documents to justify the claims you make on the application

    We recommend connecting with a loan representative as a physical approach gives you a better chance of getting approved by leveraging personal connections.

    How To Get The Best Rates?

    As mentioned over and again, finding the best rates on adoption loans and grants is directly dependent on your credit score. If you think your score is below par, here are three secured options that you must consider for the best rates. Each of these has its pros and cons as well as prerequisites.

    Home Equity Line Of Credit

    Commonly known as HELOC, this is a secured loan that ensures you get the lowest possible rates and flexible terms. If you own a house, you can apply for this loan. It is a type of revolving pre-approved funds which you can borrow against multiple times during a certain period. You can just make minimum payments on the borrowed amount throughout this period.

    After the draw period expires, you will start paying the regular monthly installments alongside the interest. The best thing about a home equity loan is that you can borrow multiple times from the line of credit to better fund each step of the adoption process. However, if you fail to repay, you might end up losing your home. Moreover, this type of loan comes with a variable interest rate, so the monthly payments can swell up quickly as the interest rates change.

    Personal Line of Credit

    A personal line of credit is similar to a credit card loan. You need to have a high score and an existing relationship with the lender (credit history, checking account, and more). Based on the lender’s discretion, you will receive a pre-approved amount in your account. You can borrow from this fund multiple times during a specific period.

    However, not everyone is eligible for this loan. Borrowers need FICO scores as high as 700 (even higher) and decent repayment history to enjoy low rates and flexible terms. It is an unsecured loan and accordingly the eligibility criteria are strict. Still, the best thing is that you will only pay interest on the portion you use from the pre-approved amount. Other similar options like a home improvement loan are worth exploring as well.

    Borrow From A 401(k)

    If you’ve been maintaining a 401(k) retirement savings account, you can use it to secure the best available rates on adoption loans. This is a great option if your credit rating doesn’t qualify for other options. It is a secured loan, but the amount approved depends on the savings. Hence, in certain cases, it doesn’t meet the expenses of adoption.

    Usually, you get 50% of the total balance in your account. One of the main benefits of taking a loan from 401(k) is that the interest rate is fixed regardless of the credit score.

    Adoption Loan Alternatives

    Choosing the right type of adoption loan programs depends on the total money you need to cover the expenses. If you need a lower amount, explore these alternatives:

    • Fundraising – Try raising funds using online platforms like GoFundMe or organize an event.
    • Adopt A Foster Child – The cost of foster care adoption is significantly lower. Check with local foster care agencies.
    • Employer Adoption Benefits – Some employers allocate funds to help employees cover adoption expenses or reimburse a portion of the expenses.
    • Try For An Adoption Grant – Check with non-profit organizations and foundations which offer grants to families interested in adopting a child.
    • Apply For A Federal Tax Credit – If eligible, you can get a tax exemption for up to one year of the adoption.


    You should consider the total financial requirement of adoption before selecting an adoption loan. There are many low-interest adoption loans available, however, these may have stringent eligibility criteria. We recommend that you review all available options and alternatives before commiting to one.

    Compare quotes from different lenders, calculate the monthly installments, and negotiate for better deals so you can get the right adoption loan to match your growing family’s needs.