Smooth moves: make relocation a breeze with a moving loan

A different home is a new chapter in your life that starts on the day you move. Whether you’re upgrading or downsizing, big changes are in store. 

Costs add up whether you’re a do-it-yourselfer or you hire a team of professional movers. You can pay for your move in a few different ways. Here’s what you need to know about moving loans—to help you figure out whether borrowing money to move might be a good idea. 

What is a moving loan?

A moving loan is a personal loan for moving expenses. 

Personal loans are usually unsecured loans. That means you’ll qualify based on your credit score and finances, not on whether you own something of value that you can borrow against. The interest rate is usually fixed, meaning the payments will be the same amount every month until the loan is paid off.

Personal loans are typically repaid in two to five years. The loan amounts often range from $5,000 to $50,000 (but some lenders offer smaller or larger loans). With a loan in this range, you should be able to cover expenses like these:

• Professional movers

• A rental truck

• Boxes and packing supplies

• Turning on utilities at your new home

• Housecleaning services

• Supplies to fix up your new or old home

• New furniture

• New appliances or electronics

• Moving insurance

• Short-term storage unit

Budgeting for your moving and relocation costs

A local move can cost $1,000 to $2,000. Bump up that distance to 1,000 miles or more and your move could cost four times as much. 

An online moving cost calculator can help you create a budget for a move. Look for one that factors in costs like these:

• Home size

• Number of movers

• Number of hours

• Distance moved

• Fuel, tolls, and other driving costs

• How much stuff is being moved

• Packing services

• Storage

• Moving supplies such as boxes and bubble wrap

• Moving add-ons such as reassembling furniture and felt pads

• Liability and valuation coverage

• Stair carry fee

• Elevator fee

• Unpacking service

You’ll also have to pay for usual travel expenses like hotel rooms and meals if you’re moving out of town.

Why consider a moving loan

Moving can be expensive, especially if the move is unexpected. It’s possible that you might have to move when you don’t have moving expenses in your budget. For example:

• Your new employer won’t pay your relocation costs.

• You don’t have enough cash to pay for the move.

• You don’t want to charge your moving costs to a credit card.

A moving loan could help make your move affordable. It could also help pay for repairs to the old home, renovations in the new home, new furniture or electronics, or any other big expense related to the move. 

Moving loans versus credit cards

A credit card is a common way to cover an expense when you don’t have enough cash to pay for it right away. If you can pay the entire credit card balance off by the due date, then it’s an interest-free loan. 

But if you do end up carrying a balance on your credit card, you might get stuck paying a high interest rate. Generally, personal loans have lower interest rates than credit cards. So if you’re going to finance the expense, a personal loan might save you money.  

It’s easy to get behind on credit card payments. Most credit cards have a variable interest rate that goes up and down with market conditions. Your minimum payment could change as your balance and your interest rate change. And it’s easy to get trapped in a cycle of paying down and charging up your card, leaving you with no specific payoff date. It’s a lot to keep track of.

A moving loan is designed to be paid off in equal monthly installments over a predetermined number of years. 

Alternatives to moving loans

Your employer

If you’re moving for a new job, a promotion, or a reassignment, your employer might pick up the tab. Besides packing and shipping costs, your employer may also cover your travel expenses and even pay for a hotel for a few days while you get your new home in order.

Move less stuff

If no one will foot the bill, you might consider selling your belongings so that you’ll have less to move. You may need some time to acquire new possessions, but cleaning house can lighten your load physically and emotionally—and is often worth the sacrifice. It feels good to start fresh, with lots of space.

Tips for a successful move

Moving can be a lot of work, especially if you’re doing most or all of it yourself. Family and friends may be able to help, but your move will probably be easiest if you hire pros.

Here are some tips for a successful move, whether you're doing it yourself or hiring someone:

• Make a checklist of what you need to do before, during and after your move.

• Start packing early.

• Label each box with the room it'll go in.

• Do as much as possible before moving day.

• Make sure you’re only moving things you really need. Donate, gift, recycle, or sell what you no longer use.

• Consider renting a portable moving container for the things you do want to keep.

• Know the red flags of moving fraud, such as a moving company that demands cash or a large deposit before the move.

• For complex moves or if you have delicate art or musical instruments, consider hiring professionals to pack for you.

• Move in the middle of the month and on a weekday, when movers can charge less. Avoid the peak summer moving season if you can.

• Get quotes from multiple movers to get the best price.

• Schedule utilities to start at your new home before you get there.

• Pack a moving essentials tote with non-perishable food, clean clothes, and bedding so that you’ll have everything you need right at hand as soon as you arrive at your new home.

How to apply for a moving loan

It’s a good idea to get a quote from a lender who can check your rate with a soft credit pull. That'll give you an idea of what kind of loan you’ll qualify for, without harm to your credit score. Once you submit a formal application, your credit score could dip by a few points.

Applying for a personal loan generally happens online. But if you’re more comfortable, most lenders will take your application over the phone. Once you provide your details, the lender will review your credit score, credit history, debts, and income. 

You’ll be asked how much you want to borrow, how you plan to use the money, and some additional personal information to verify your identity. The lender might also ask for recent pay stubs or other proof of income.

Once you’re approved, you could receive the loan funds in your bank account in as little as 24-72 hours. And then you can get moving.