Adoption Loans and 4 Other Financing Options

Adopting a child is one way to grow your family, but the process can be expensive. The average cost of adoption can range dramatically depending on the route you pursue, from less than $2,600 through the public child welfare system (or even no cost) to as much as $70,000 through an intercountry program.

Compare adoption loan rates

Adoption loans come in multiple forms. Unsecured personal loans are perhaps the quickest and easiest to get. They're available from traditional banks, credit unions, and online lenders and can be used to pay for adoption expenses alone or in concert with grants and other funding sources.

How do adoption loans work?

Interest-free adoptions loans and grants are best if you can qualify. But personal loans are a way to finance adoption costs, including travel expenses, legal fees, medical fees, supplies, and more, over a period of years with customizable monthly payments. Personal loans have fixed interest rates, meaning the payments are predictable.

• APRs range from around 7% APR to 36% APR, depending on your credit profile, income, and current debt. The average APR on a 24-month personal loan was 12.32%, according to the latest Federal Reserve data.
• Loan amounts can range from under $1,000 up to $200,000, depending on the lender — though to be eligible, you’ll need to show the lender you have sufficient income to make payments and meet its other requirements. 
• Repayment terms typically extend from one to seven years, though some lenders may offer longer terms for larger loans.
• Funding and approval often happen within days of submitting your application. Some lenders, like LightStream, even offer same-day approvals and funding.

If you have home equity, you could potentially leverage that to pay for adoption expenses. Relative to a personal loan, you could have access to a larger loan amount, depending on your home's equity, and a lower interest rate. However, your home will be on the line as collateral, the closing process can take a month or more, and closing costs can be steep.

Repayment terms on home equity-based loans, including home equity lines of credit (HELOCs) may extend to 30 years, depending on the lender and type of loan. Note that lenders will not typically approve a home equity loan if you owe more than 85% of your home's current value.

Related: How Do Personal Loans Work?

How to get an adoption loan

Personal loans are relatively easy to get compared to other loan types and funds can be available within days. While home equity-based loans have lower rates, they also have a longer approval process, additional steps (including an appraisal), and typically more paperwork.

1. Assess your finances: Your finances and credit profile are the most important factors a lender considers when deciding whether to approve you and determining your APR. Check your credit report for errors to ensure nothing is dragging your score down. If you find any, report them immediately to the credit bureaus. Additionally, look at your DTI (the percentage of your gross monthly income that goes toward debt payments) to see whether you have room in your budget for an additional monthly payment. Lenders typically prefer a DTI under 36%, though this can vary.
2. Calculate costs: The cost of adoption varies significantly depending on the route you choose. Adoption through the public child welfare system costs significantly less than an adoption through a private agency, while a domestic adoption can cost less than adopting internationally. If you haven't already, determine how you'll adopt, then reach out to adoption agencies to narrow down the scope of your costs.
3. Shop around for loans: Once you’ve considered your financial situation and how much you need to borrow, start comparing lenders. Narrow down your list by looking at eligibility requirements, and consider each lender’s available loan amounts, repayment terms, fees, and annual percentage rates.
4. Get prequalified: Many personal loan lenders allow you to prequalify to see loan amounts, rates, and terms you might qualify for (without impacting your credit). Prequalification isn’t an offer of credit, so it’s no guarantee your application will be ultimately approved and your final rate may differ. But it can help you get an idea of the options different lenders may offer.
5. Complete your loan application: Once you decide on a lender, complete the application. You’ll often consent to a hard credit inquiry at this stage, which could ding your score temporarily. You'll also provide information about your employment and income. If your application is approved, review the loan agreement and sign the required documentation to receive your funds.

Learn More: How To Get a Personal Loan

Learn More: What Credit Score Do You Need for a Personal Loan?

Adoption loans for bad credit

Your eligibility for a loan is based largely on your credit profile, among other financial factors. A bad credit score doesn’t necessarily mean you’re ineligible for a loan, however.

There are several personal loan lenders, especially online, that offer loans for bad credit. These lenders often weigh other factors more heavily to gauge whether you’ll repay the loan, such as your assets or income.

But bad-credit loans are not without downsides. First, you may be limited to only borrowing a certain amount. For example, lenders that offer loans up to $100,000 may be less inclined to offer that amount to someone with poor credit. Additionally, because your APR is based largely on your credit score, a lower score is likely to result in a high rate, which translates to a higher monthly payment.

It’s up to you to consider these downsides as they relate to your situation. If you are concerned about high rates and qualifying for an appropriate amount, you may decide to postpone your adoption journey until you can improve your credit enough to qualify for a loan with more favorable terms.

Related: How To Build Credit: 10 Easy Strategies

Compare rates on bad credit loans for adoption

Interest-free adoption loans

There are a variety of interest-free loans specifically for adoption. However, eligibility for these loans may be limited. They’re often offered by religious organizations and are only available to families that meet certain eligibility requirements, such as religious affiliation and family structure.

Some sources of interest-free adoption loans include:

• ABBA Fund
• Lifesong
• A Child Waits Foundation
• Pathways for Little Feet

Adoption grants

A loan isn’t your only option to fund adoption. Adoption grants are also available to help families overcome the cost. The key benefit to grants is that the funds don’t have to be repaid. More of your money can stay in your pocket, helping support your growing family.

Different grant programs may help fund different types of adoptions or the various costs associated with the process. Some available resources that provide grants include:

• A Child Waits Foundation (also provides loans)
• Gift of Adoption Fund
• Help Us Adopt
• National Adoption Foundation

As you’re financially preparing to adopt, remember that you can use funds from various sources together. For example, you may receive some grant money and then use a personal loan to finance the costs not covered by grants.

Home equity financing

The structure of home equity financing depends on whether you have a loan or a line of credit. A home equity loan is structured similarly to a personal loan, with a lump sum amount, a fixed interest rate, and fixed monthly payments.

A HELOC, on the other hand, generally has a variable interest rate and allows you to pull out money as needed during the draw period.

Another option for home equity financing is a cash-out refinance. Instead of taking out an additional loan on top of your existing mortgage, a cash-out refinance replaces your current mortgage with a larger one and allows you to pull out the difference in cash.

Similar to your mortgage, home equity financing gives your lender the right to foreclose on your home if you can’t or don’t repay the loan.

Adoption crowdfunding

If you have a large personal network, and/or a powerful story, you may find success using crowdfunding for adoption. Crowdfunding involves asking other parties for money to help you reach your goal. 

You can set up crowdfunding efforts on Adopt Together and ABBA Fund, as well as GoFundMe and similar websites to enlist friends, family, and even strangers to contribute to your adoption goal.

Crowdfunding, like grants, doesn’t require that you repay the funds. However, there may be fees associated with the crowdfunding platform you choose.

Adoption tax credit

The federal government offers a tax credit, subject to income limits, to help cover qualified adoption expenses. The credit is adjusted each year and is $17,280 for 2025; it was $16,810 for 2024. The credit applies to qualified adoption expenses, which include:

• Reasonable and necessary adoption fees
• Court and attorney costs
• Travel expenses, including meals and lodging
• Other expenses directly related to a legal adoption

The adoption tax credit is nonrefundable, meaning you can’t claim more than your total tax liability for the year. 

For example, if you only have a tax liability of $10,000 for the year, your potential tax credit is limited to $10,000. Any remaining amount can be carried forward up to five years, however.

Exclusion for employer-provided benefits

Adoption assistance of up to $17,280 provided by your employer can be excluded from your taxable income in 2025. You can't claim the adoption credit for expenses that were reimbursed. But you can exclude the full amount of employer-provided benefits and still take advantage of the maximum adoption tax credit, as long as it covers additional unreimbursed expenses. 

In other words, you can't use the same expenses to claim the tax credit that were covered by your employer and excluded from income.

Related Articles:

• Does Applying for a Loan Hurt Your Credit Score?
• How Does a Personal Loan Affect Your Credit Score?
• How To Get a $45,000 Loan
• Best Personal Loans
• Best Personal Loans for Good Credit
• Best Personal Loans for Fair Credit
• Best Personal Loans for Excellent Credit