Ok, so the second plan of action in my “ask nicely, borrow and fundraise,” advice for funding your adoption is “borrow”.

Let’s face it…no one likes to borrow money. No one enjoys debt. And yet we take out loans for houses and cars and vacations and lots of other things and don’t over-think it too much. Personally, I can’t think of a better reason to get into debt than adopting a child. Hopefully you will be successful enough with the “ask nicely” and “fundraising” aspects of paying for your adoption and combining that with what you have saved, you won’t have to get into “too” much debt to make it happen.

If you have to get into debt, my advice is to do it wisely. Here are some options for borrowing money for your adoption.

Borrow from family or friends- Like I said, it is not easy to ask family and friends for money, and many of us may not have family or friends in the position of being able to lend us money, but I know many people who this has worked well for. One of the nicest things about this option is that families often do not charge you interest, are more flexible about paying it back and the loan does not show up on your credit report.

Home equity loans or lines of credit- With house prices and values sky-rocketing in most parts of the country, most home owners have the luxury of equity these days. Compare rates with lenders and banks, and talk to a tax professional regarding the tax benefits of this type of loan for your adoption.

401K- If you have a 401K, it is sometimes possible to borrow money from yourself, with a big advantage being that you would also be “paying yourself” interest. The risk to this option is that if you change companies, you will be expected to pay off the loan or take the 10 percent tax penalty on the loan amount as an early withdrawal.

Low or no-interest credit cards- I know you get them…those annoying credit card applications that fill up your mail box. But as annoying as they are, there are some good ones out there. It is possible to take advantage of the competition between credit card companies and find the ones that offer long-term low-interest or no interest. Many people do this and then plan on paying the credit card off with their Adoption Tax credit tax return.

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