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Infertility and fertility 101.
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  • Writer's pictureLaKesha Brooks

What to Keep In Mind When Applying for Fertility Loans

Updated: Dec 12, 2022

Building a family through the pursuit of fertility treatment and adoption requires significant upfront payment if you don't have insurance or other means of covering the costs. One option to cover the expense is through a personal or consumer loan. An adoption or IVF loan allows you to pay for adoption services and treatments quickly, reducing delays in your family-building journey. There's also greater affordability in spreading out payments over time than having to bear the entire cost in one payment. Also, personal loans don't require collateral, meaning you don't have to put something up like a car or your home that can be repossessed if you cannot repay.

What lenders take into account when making loan decisions

As lenders want to best assess a borrower's likelihood of repayment, your credit history takes center stage in the decision process. Your credit history includes job stability, whether you rent or own your home and how long you've been on your job and lived in your home.

Your debt to income ratio is critical as well. Do you have enough income coming in every month to cover your current expenses AND the loan you are applying for? The lower your debt to income ratio, the better as it demonstrates a stronger ability to repay the loan in the lender's eyes. The debt calculations include your mortgage, car payment, student loans, minimum credit card payments, and any alimony or child support. All of these factors go into the determination of your credit score.

Some surprising factors can affect your credit score, such as credit mix and credit utilization. Your credit mix is the variety of loans in your credit file, such as mortgages, student loans, auto loans, etc. Credit utilization is the percentage of your available credit lines that you use. Thirty percent or less of credit utilization is viewed more favorably.

Innovative lenders are starting to take more into account than your credit score when making loan approvals. You may be able to connect your bank account details so additional factors such as your recurring income and withdrawals, utility payment history, or whether your paycheck is directly deposited can be taken into account. In addition, some financial institutions are utilizing artificial intelligence (AI) and machine learning (ML) technology that collects multiple financial data points and helps them make more precise decisions. This has helped improve access to borrowers who would've otherwise been denied in many instances.

4 things to keep in mind when searching for a loan:

  1. Interest rates and APRs: Rates may vary based on your credit history, the amount you borrow, and other factors. Your interest rate might change over time. Confirm whether your rate is fixed or variable. An APR includes the interest rate and any fees as well. So, your APR is the total "cost" of borrowing.

  2. Length of term: Before signing on the dotted line, understand how your payments will be applied and when they'll be due. Get this in writing so that there are no surprises later on. Look for any potential early repayment penalties.

  3. Accessibility: Understand how quickly you'll receive funds after approval – some lenders may require a waiting period from when an application is received until the funds are disbursed.

  4. Carefully compare loan options from different lenders: Consider interest rates/APRs, payment options, loan amounts, and application procedures. Get all information in writing to know upfront what fees will be associated with the loan. Sweet Pea has partnered with an online lending marketplace to allow you to be able to do so.

If you'd like more helpful tips and strategies for affordably building your family, join the Sweet Pea Community.

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