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 IVF or any infertility treatment is a high-risk gamble for both the family and lender.
It’s so scary that banks and finance companies have left the market. Taking a medical loan in advance of losing an income, just as expenses rise is a recipe for a financial meltdown. Before taking out a loan learn about important options to protect family finances:
- Creating loan security
- Review of IVF financing options
- Interest free financing programs
- People with bad credit
Security for Infertility Treatment Financing
Taking out an IVF or infertility treatment loan allows you to begin your procedure right away. But infertility treatment costs are high enough already without adding financing costs. When the infertility treatments succeed mom’s pregnancy often means additional expenses in the form of left-over medical expenses of 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 loan payments in a timely manner. An increase in expenses may hamper a couple’s ability to repay the loans. Lost income during maternity leave compounds the problems.
Supplemental health insurance for infertility treatments help you secure your ability to repay your loan. 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 of IVF and other infertility treatments. 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 needing cash to finance infertility treatments 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 on less expensive infertility treatments, before seeking a loan to pay for IVF. Then mom gets pregnant.
IVF pregnancies are often high risk meaning extra medical bills, combined with lost income for a pregnancy leave for bed rest. Many IVF multiples are 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?
Review of IVF Financing Options
Many of the larger clinics offer IVF financing options that take the form of a refund or rebate program. The idea is to protect family finances in the event that multiple IVF cycles fail to result in a live birth. This form of IVF financing helps preserve your capital to continue with infertility treatments or move on to adoption.
Supplemental health insurance for IVF works in the opposite manner. The refund programs help finance IVF in the event it fails – which is often the smaller expense. This program provides benefits when IVF succeeds. Often the two can be used in combination. One hedges against the other.
Interest Free Infertility Financing
If your employer(s) offer Flexible Spending Accounts (FSA) you have an interest free infertility or IVF financing option 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 or IVF 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?
IVF Donation Grant
If you leave your employer any time during the plan year you are not responsible for the remaining balance. Your employer just gave you an IVF donation grant. Many women stop working when they get pregnant, so this scenario can happen.
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.