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Can You Finance Your Move? 

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Between buying packing supplies and renting a moving truck, moving can get pretty expensive. Because relocating is so costly, paying for your moving costs out of pocket may not be possible. That’s where moving loans come in. They’re unsecured personal loans that allow you to finance part or all of your moving costs and pay them back over months or years. Here’s an overview of how relocation loans work to help you decide if they’re right for you.

What are moving loans?

Moving loans are a type of unsecured personal loan that you can use to fund some or all of your relocation expenses. You can use them to pay for things like movers, rental trucks, security deposits, moving insurance, and even the hotels you stay in on the way to your new place. Relocation loans usually have lower interest rates than credit cards, so they may be a more affordable way to finance your move. But some loans for moving come with high fees like prepayment penalties and origination fees, so make sure you consider the costs before you take one out.

How does a moving loan work?

Relocation loans allow you to borrow a lump sum of money to fund your move — for example, Upstart lends between $1,000 and $50,000 — and then you can repay it over a few months or years. They have fixed interest rates, so your monthly payment will stay the same over the whole life of the loan. Relocation loans are also unsecured, so you won’t need to put up any collateral. And depending on which lender you choose, you may be able to get your money on the same day you apply.

The application process for moving loans is the same as other personal loans. You’ll need to fill out an application and provide your lender with financial documents — like your pay stubs and bank statements. Your lender will also check your credit when deciding whether or not to work with you.

Note: too much debt can prevent you from qualifying or may result in a higher interest rate. Additionally, it may be more challenging to get a moving loan with bad credit.

The pros and cons of taking out loans for moving expenses:

Moving loans typically have lower interest rates than credit cards, but may come with extra fees — like prepayment penalties and origination fees. And if you’re purchasing a home, taking on the new debt could cause issues with your mortgage approval. Before you get a loan for moving expenses, consider the pros and cons, which we highlight below.

Pros: Cons:
  • Moving loans typically have lower interest rates than credit cards.
  • They have fixed repayment terms, so you know exactly when you’ll be out of debt.
  • They’re typically unsecured, so you won’t need collateral.
  • Lenders usually offer a wide range of loan amounts, allowing you to finance a small or large move.
  • If you’re purchasing a home, getting a moving loan may affect your mortgage approval.
  • Moving loans can come with high fees.
  • You may not qualify if you have a low credit score.
  • Taking out a loan will add to your debt load and may strain your budget.

Alternatives to moving loans

Moving loans aren’t right for everyone. Here are some alternatives you may want to consider.

Credit cards

Credit cards usually have higher interest rates than moving loans — the average APR for credit cards is 14.52% compared to just 9.50% for personal loans. But using your credit card to cover moving expenses may still be a good option if it has a long interest-free period. Some credit cards offer a 0% introductory APR on purchases for up to 18 months, but you’ll need good credit to qualify. You’ll also have to pay off your debt before the interest-free period ends, or you could get stuck paying a high-interest rate.

Job relocation package

If you’re moving out of town for a new job, your employer may help you with moving costs. Many companies offer relocation packages, but what’s covered varies. Some employers will reimburse all of your moving costs, while others will only pay for certain expenses (like movers). You can find out the specifics of your company’s policy by talking to the Human Resources department.

Savings

If you aren’t moving for a few months, you may be able to save up enough money to cover your moving costs out-of-pocket. Try to find ways to cut back your spending like canceling subscriptions and eating out less. Increasing your income by taking on more hours at work, getting a side hustle, or selling unwanted clothes or furniture can also help you save more money.

The bottom line

Relocation loans usually have lower interest rates than credit cards, which could make them a good option for financing your move. But they typically require good credit and may come with high fees depending on the lender. So before you take one out, make sure you understand the costs and can afford the monthly payments.

Frequently asked questions

Can you get a moving loan with bad credit? 

While you can get moving loans with bad credit, you’ll end up paying a higher interest rate. Getting someone with good credit to cosign your relocation loan for you could get you more favorable terms.

How do I get a moving loan? 

Most banks and credit unions offer unsecured personal loans that you can use to cover your moving costs. You can usually apply online or in person.

Should I take out a personal loan to move? 

If you can’t afford to pay for your move out-of-pocket, personal loans can be a good option. But some moving loans require decent credit and may come with high fees, so weigh the costs and look into alternatives before you take one out. Paying for your moving costs with a zero-interest credit card, for example, could be cheaper.


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