Believe it or not there is interest free infertility treatment financing options available – even for people with bad credit. Taking out a loan to pay for any infertility procedure is a high-risk gamble for both the family and lender.
It’s so scary that many banks and finance companies have all but left the market. Taking a medical loan just before losing an income during maternity leave is a recipe for a financial meltdown:
- Options for creating loan security
- Interest free financing programs
- Options People with bad credit
Security for Infertility Treatment Financing
Taking out an infertility treatment loan allows you to begin your procedure right away. But costs are high enough already without adding interest charges. When the procedure succeed mom’s pregnancy often means additional expenses in the form of left-over medical expenses for prenatal care, and labor and delivery charges. Most often she then takes an unpaid maternity leave.
Borrowing Requires Future Income
Any financing requires a future income stream in order to make the monthly payments in a timely manner. An increase in expenses may hamper a couple’s ability to repay the balance. Lost income during maternity leave compounds the problems.
Supplemental health insurance for infertility treatments help you secure your ability to repay the borrowed amounts. Remember the objective of any infertility treatment: get pregnant and bring home a baby. These programs help secure mom’s income during a resulting pregnancy and maternity leave, and soften the impact of un-reimbursed medical expenses.
Diminished Financing Options
Infertility treatment financing options have diminished greatly after the banking meltdown that occurred in 2007. In the past, couples were able to take out medical loans to help cover the costs infertility procedures. After the meltdown many banks and healthcare financing companies pulled out of this market. The risks were always very high for a very simple reason; couples borrowing money in order to get pregnant are very poor credit risks.
Poor Credit Risks
Even couples with top-notch FICO scores can get into serious financial trouble when taking out infertility loans. Often, they spent down most of their cash reserves, before needing to borrow more money to continue with the procedures. Then mom gets pregnant.
Pregnancies resulting from any artificial reproductive technique are often high risk. This means extra medical bills, combined with lost income for a pregnancy leave for bed rest. Many women taking fertility medications conceive multiples. Twins and triplets are often delivered preterm adding even more expenses. Then mom takes an unpaid maternity leave, followed by additional lost income caring for sick infants. And then her employer moves her health insurance coverage onto COBRA driving cost even further.
Get the picture? Would you lend your hard earned money to somebody likely to experience these financial challenges? As of 2012 the primary lender in this arena, Capital One, publishes on its website that they are no longer accepting healthcare financing applications. Now you know why.
Home Equity Financing
Now that so many medical financing companies have abandoned the infertility treatment market many couples may consider home equity financing instead. The bank simply looks at your income, assets, and the amount of equity in your home. They do not always ask why you need the money. The interest paid may be tax deductible, making home equity financing a possible option.
But if problems crop up from the resulting pregnancy, do you really want to put your home on the line?
Interest Free Infertility Financing
If your employer(s) offer Flexible Spending Accounts (FSA) you have an interest free infertility financing program right under your nose. You have a rare opportunity to plan an unreimbursed medical expense at a time most convenient to you.
You elect to contribute $5,000 into two FSA plans for the year beginning January 1, and to make contributions of almost $100 per weekly over the next year. You undergo IVF treatments on January 1, incurring $5,000 or more in costs. The entire $5,000 is payable immediately by your employer – before you make your first contribution.
Your obligation is to continue making $100 contributions over the next twelve months directly from your paycheck. Your $100 weekly pretax payroll deduction reduces the amount you pay in FICA, Federal and State income taxes. A family might reduce their total tax payments by 1/3 using an FSA.
Minus 51% Interest Rate
This is how a couple could get a $5,000 interest free infertility loan using their FSA. Only the loan is not interest free. The actual interest rates could be as low as -51% depending upon income levels of the family. A couple saving 1/3 in taxes would need to earn $7,500 in gross income to have $5,000 to make in loan payments. That equates to almost a minus 50% interest rate. Is there a better deal anywhere else?
People with Bad Credit
An FSA provides infertility treatment financing for people with bad credit. The financing qualifications are easily met. You have to be working with an employer that offers flexible spending to its employees. If both husband and wife have jobs where employers offer an FSA, you may be able to double the amount of your loan.
People with bad credit are guaranteed to qualify. The only qualification is whether you are willing to participate. Employers will not run credit checks. Even if your FICO score is very low you get the loan. If one or both employees leave before repaying the FSA loan it does not affect your credit score. Employers do not report this information to the credit bureaus.
Members of the Military
Members of the military and their families currently do not have access to flexible spending accounts. The Defense Authorization Bill instructed the DOD to enable this option for military personnel, but has yet to act when this article was written.
Meanwhile any military personnel wounded during active duty may find some help. The TriCare health program may help make payments for selected infertility treatments if the wounds impact your reproductive organs.