Baby Loans: Personal Loans to Help with Newborns

Raising a child in the United States is more expensive now than ever. The healthcare costs involved in having a new baby alone are enormous, and this is a cost that people often overlook in their plans for having children.

Covering these costs can be a challenge, but there are tools in place that can help you shoulder the expense of a new child. This article explores loans for parents with new babies and provides cost-saving tips on caring for your baby.

Having a New Baby is Expensive

The excitement around having a new child often leads parents to ignore or underestimate the costs involved with raising a child. One study found that 36% of people planning on having a baby within the next three years believed the cost of a raising the average U.S. baby was between $1,001 and $5,000 during the baby’s first year. 18% of such parents thought the cost was less than $1,000.

In reality, the average hospital childbirth alone costs $3,500. Once prenatal, delivery-related and post-partum health care are factored in, the average overall cost of childbirth runs to over $8,000.

The cost of a baby’s first year runs, on average, from $21,248 for lower-income families to $51,985 for higher-income families. The $21,248 figure is for families earning $40,000 per year so lower-income families can expect to devote over half of their income to their child. This leaves many parents unable to cover other expenses, like insurance or a college fund.

The costs of a baby’s first year include expenses like:

• Housing
• Food
• Transportation
• Childcare
• Healthcare
• Miscellaneous (stroller, crib, toys, diapers, etc.)

A survey of current parents showed that 57% regretted not preparing and budgeting more carefully. One useful tool is a first-year baby costs calculator, which can guide you through the expected costs and help you budget.

Are There Loans for Parents with New Babies

There are personal loans targeted for big purchases like homes, computers, and furniture, and lenders offer loans for new babies as well. These loans are just like regular loans, but with a specific purpose in mind: covering the cost of having a newborn.

Borrowers qualify for a baby loan the same way as a personal loan, by meeting certain minimum qualifications. Most lenders require that borrowers have a minimum credit score or income, or have a cosigner. If you are eligible for a personal loan for a newborn baby, you will qualify for a certain loan amount, term length, and interest rate. After agreeing on an amount and repayment schedule, you will receive the funds, and start making payments on the loan according to the schedule.

Covering the cost of having a newborn with a personal loan can save you the exorbitant interest rates that come with credit cards.

3 Quick Steps to Take a Personal Loan with Stilt

Stilt is a lender that offers more flexible terms of eligibility, in an effort to open the credit system to immigrants and noncitizens. Applying for a loan with Stilt is simple and expedient; there are only three steps in the application process

1. Submit an Application

First, you complete an application on Stilt’s website. Filling out this application only takes a few minutes, and involves answering basic questions about income, education, employment, and more. You also authorize a credit pull upon submitting the application.

2. Receive an Offer

If your application meets the eligibility requirements, then you will receive a loan offer. You will qualify for a certain range of loan amounts and term lengths, along with an interest rate based on the strength of your finances and income. Once you receive the offer, all you have to do is agree to an amount and repayment schedule, and sign a promissory note. The funds will then immediately be transferred to your account.

3. Start Making Payments

The repayment schedule will detail the monthly amount and due date for monthly payments. Once you receive the loan, you start making payments according to the repayment schedule.

There is nothing more stressful than being unsure that you can cover the basic expenses of caring for your newborn child. A loan for a newborn baby is one way that you manage to get the funds, and Stilt is a solid option for immigrants and noncitizens who may otherwise struggle to qualify for a loan.

5 Ways to Save Money When You Have a New Baby

With the funds to care for your newborn secured, you can start planning and budgeting for the expenses. You should still be economical and resourceful in finding ways to save, and the following tips will help you cut costs.

1. Look for Multi-Purpose Furniture

Specialized pieces of baby furniture like changing tables and dressers are typically very expensive. One simple way to cut costs is to get two-in-one pieces of furniture that can provide multiple functions for your newborn. You can also repurpose furniture for one point in a baby’s life to suit their needs at a different point, like turning a crib into a toddler bed.

2. Buy Diapers in Bulk

As with toilet paper and paper towels, the more you buy, the less you pay per unit. Getting your diapers from a wholesale club, where you can buy as much as 228-count, can save you hundreds over the course of a year. Buying in bulk also saves you the time of constantly having to run out and get new diapers.

3. Don’t Buy Baby Clothes Too Far in Advance

The growth and development of a newborn doesn’t always follow your plans, and your child may grow out of a size much quicker than you think. A simple way to avoid losing money on little-used or unused clothes is by not buying clothes too far in advance. You can buy your baby a pair of shorts in the winter and they may not fit by the summer, so only buy clothes that you know will fit your child at the time it is needed.

4. Make Your Own Baby Food

There is no magic ingredient for popular baby foods, and you can create your own nutritious baby formulas easily enough at home. All it takes is a natural ingredient that you can mash up with a fork or spoon, like a banana, sweet potato, or zucchini. One of any of these can make multiple servings, savings that can add up over time.

5. Ask for Coupons and Samples

Maternity wards are often stock-full of useful coupons, samples, and travel products that can get new mothers started. Busy nurses may not remember to offer all of the amenities they offer, so don’t be afraid to ask the staff for any free extras that you won’t have to buy.

Conclusion

Caring for a new baby is challenging enough, and a baby loan can help put the cost out of your mind as you get through the tough first year of parenthood. With Stilt, immigrants and noncitizens also have an opportunity to obtain credit, and filling out an application only takes minutes.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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