Surrogacy is a great option for those looking to build the family of their dreams, but most couples or individuals don’t have the money set aside to cover the costs. That’s where financing comes in, and there are a growing number of options for Intended Parents to consider.
A secured loan is connected to a piece of collateral (i.e. your car or home). A secured debt simply means that in the event of a default, the lender can use the asset to repay the funds it has advanced the borrower. Common types of secured financing are mortgages and auto loans. Typically secured financing is easier to obtain, since there is a lower risk for the lender. Secured loans offer the advantages of lower interest rates, larger loan amounts, or more flexibility in payment terms.
An unsecured loan is not protected by collateral. The lender can’t automatically take your property if you default on the loan. Lenders issue funds based solely on the borrower’s credit score and their promise to repay. The most common types of unsecured loans are credit cards, student loans, and personal loans.
Things to Consider When Financing Your Surrogacy Journey
Surrogacy can be a stressful financial journey if the Intended Parents do not understand the costs before starting. The first thing you should know, is that your surrogacy journey will most likely exceed $100,000. Multiple factors can influence the cost of surrogacy. When you start to look at surrogacy as an option, the following factors should be considered:
How much is the whole process going to cost?
Before determining financing, it is important to know approximately how much the journey will cost. Each journey is unique, and costs will vary depending on the circumstances. Costs may include medications and procedures, IVF for the surrogate, and the surrogate’s compensation. To understand the process a little more and have a clear idea of what your journey will cost, Physician’s Surrogacy offers a complimentary consultation.
What are the options for financing surrogacy?
There are more surrogacy financing options than many people realize. Surrogacy options for financing that Intended Parents regularly use include:
Savings: Many people use their personal savings since you are not adding debt. However, most people’s savings can’t cover every expense. It is recommended that you build surrogacy savings into your budget. Set up a special account for surrogacy and save the same way you would for college, a new home or a vacation.
Loans from your 401k retirement fund: Technically it’s not a loan since it’s your money. However, there may be rules in place about making withdrawals and the tax consequences. It’s not advisable for any couple to take from their 401K retirement unless they know the specifics of how much it costs to take it out (penalties regarding age). Also, look at past jobs and see if there is money in a 401k plan that you have not “rolled over.” It is also a good idea to speak with your HR representative before considering this option.
Fertility Loans: Most surrogacy agencies have relationships with loan companies that will provide access to loans up to $100,000 for any assisted reproductive expenses. This usually includes medications and egg donor and surrogacy services. See below for the companies that we work with.
Surrogacy Grants: There are organizations out there that want to help you build your family by financing your surrogacy options. Some require the recipients to live in certain states or belong to a certain religion, but many are open to anyone who meets their qualifications.
Credit Cards or Personal Lines of Credit from the Bank: This is probably the most expensive way to go for surrogacy financing but is easy to use. Before starting your surrogacy journey, you can request either a personal line of credit from your bank or request a higher limit on your credit cards. When you have a payment schedule to work from you can plan your use of the credit to cover just the amount you need at that time.
Second mortgage or loan against the equ