First come love, then comes marriage, then comes a baby at 10.99% APR?
As couples continue to wait to have children, many face the problem of infertility. Treatments such as IVF cost tens of thousands of dollars – a sum far greater than many can afford. So they take out loans.
Not all insurance plans cover infertility, so loans are a popular option for couples hoping to have a baby. Not sure what kind of loan to take? Read below to see what the options are.
You can take a loan from your 401k if you currently have one through your employer. You can only borrow the amount that you currently have invested, which may or may not be enough depending on the costs of your fertility treatments.
Taking out a 401k loan may be a bad idea for those with unstable jobs, since you will have to repay the loan very quickly if you lose the job tied to your 401k.
If you don't pay the loan back in time, it is considered a withdrawal instead of a loan. If you're younger than 59.5, you will have to pay an extra 10 percent withdrawal penalty. Even if you do pay the loan back in time, you will have forfeited any market gains that your investment might have earned while you had the loan.
Home Equity Loan
Many people use home equity loans for remodeling projects and big updates, but you can also use it for infertility. The amount you're eligible for is dependent upon how much equity you have in the home, or how much of the principal you've paid and what the home is worth now.
The only downside to these types of loans is that you risk losing your house if you fail to pay back the loan. The bank lends you the money and keeps the home as collateral, so be sure you can afford the payments before you risk losing your house.
You may also apply to your bank or credit union for a personal loan. If you and your spouse have accounts at several banks, don't be afraid to ask all of them for their rates. Because this is an unsecured loan, interest rates may be higher than for a loan backed by a house or other piece of collateral.
Some doctors and fertility clinics will also offer financing directly and will work with you on creating a payoff plan. Treatments like IVF can cost $10,000 per round and most people require several rounds to get pregnant.
Programs such as AttainIVF and others are available nationally and can work with your physician.
Taking Out a Loan
Taking out a loan for your future little one is like getting a mortgage or car loan. Your interest rates will depend on the lender, your credit score and the total amount of the loan.
Make sure to shop around for the best rates. Refinancing may be harder for fertility loans, so it's important to find the best rate first.
Consider what fees are attached to the loan. Will you be charged more if you pay off the loan early? What are the late fees? Are there any additional fees or costs associated with the loan? Will you need a cosigner if your credit isn't high enough? By weighing all of your options carefully, you can choose the best loan that is right for you.