How to Pay Back an Adoption Loan

You probably had to get creative in obtaining the funds needed to pursue adoption so you may need to get creative in paying it back. Here are some of my favorite ways to get the loans paid back.

1. Use your tax refund. The federal tax credit for qualifying adoptions is over $13,000. This is a tax credit, which in essence means you will receive every dollar back. Of course, this can be rolled over for up to five years and you will only receive credit for your actual qualifying adoption expenses. Most states also have an adoption credit, so make sure you check with your CPA on that as well. When you receive your tax refund, use every dollar of it to pay back the adoption loan. You should not be expecting this money and it should not be accounted for in any other place. That way, you can use every dollar you receive to pay back the adoption loan that much faster.

2. Fundraise. If you didn’t fundraise while “waiting” for your adoption, you can do it now that your child is here. This can get a little tricky and to some does not feel “right” asking for donations or money when you have a baby because if you could get pregnant and have a baby the “natural” way you wouldn’t be asking people for money or donations. Which I totally get, but if you are open to the idea, use it. We used fundraising while waiting for our adoption with www.ordinaryhero.com. You could also have a large garage sale, hold a benefit, use online sites such as gofundme.com, etc. Any of the money you earn during put directly on the adoption loan. That way you can pay the loan off as soon as possible. 

3. Create a budget. If you didn’t already create a budget while waiting for your child, now is the time. Children are extremely expensive and so is an adoption. This is a very important tool for every family to use. We keep track of all of our income and expenses in an Excel spreadsheet. You could use the good old paper and pencil method as well! But keep track of what is coming in and what is going out. At the end of every month, any extra money you have left over you should put directly on the adoption loan, again, that way paying off the loan as soon as possible. Just like the tax refund, any other “unexpected” money should be put directly on the adoption loan. You don’t want to have the extra debt hanging over your head forever as a constant reminder, get it paid off!