5 Smart Ways To Finance Your Move Without Draining Savings

Moving to a new home often comes with significant expenses that can strain your budget. From hiring movers to covering security deposits, the costs add up quickly. Fortunately, loans designed specifically for relocating can provide the financial flexibility needed during this transitional period.

What Is a Moving Loan?

A moving loan is a personal loan used specifically to cover relocation expenses. These unsecured loans provide a lump sum of money that you repay over a fixed period, typically with a fixed interest rate. Unlike credit cards, which might have variable rates, moving loans offer predictable monthly payments.

These loans can cover various moving expenses, including professional movers, rental trucks, storage units, security deposits, and even new furniture for your home. The application process usually involves a credit check and verification of income to determine your loan eligibility and interest rate.

How Moving Loans Work

Moving loans function similarly to other personal loans. After approval, the lender deposits the funds directly into your bank account, allowing you to use the money as needed for your move. Repayment terms typically range from 12 to 60 months, with interest rates varying based on your credit score and financial situation.

Most moving loans don't require collateral, meaning you don't need to put up assets like your car or home to secure the loan. However, this also means interest rates might be higher compared to secured loans. When applying, lenders will examine your credit history, income, and existing debt to determine whether you qualify and what terms to offer.

Types of Loans for Moving Expenses

Several loan options exist for financing your move, each with distinct advantages:

Personal loans: Offered by banks, credit unions, and online lenders, these versatile loans can cover any moving expense. Interest rates typically range from 6% to 36%, depending on your credit profile.
Credit union relocation loans: Credit unions sometimes offer specialized relocation loans with competitive rates for members.
Employer relocation assistance: Some employers provide relocation packages that might include loans or reimbursements for moving expenses.
0% APR credit cards: Cards with promotional 0% interest periods can be cost-effective if you can repay the balance before the promotional period ends.

Each option has different qualification requirements, so it's important to research what might work best for your situation.

Moving Loan Provider Comparison

When choosing a moving loan provider, comparing options can help you find the best terms. Here's how some major lenders compare:

Lender	APR Range	Loan Amounts	Term Lengths
SoFi	7.99% - 23.43%	$5,000 - $100,000	24-84 months
Discover	6.99% - 24.99%	$2,500 - $35,000	36-84 months
Marcus by Goldman Sachs	7.49% - 24.99%	$3,500 - $40,000	36-72 months
LightStream	7.49% - 25.49%	$5,000 - $100,000	24-144 months

Credit Karma offers tools to compare personalized loan offers based on your credit profile without affecting your credit score. Online marketplaces like LendingTree also allow you to compare multiple lenders with a single application.

Benefits and Drawbacks of Moving Loans

Before applying for a moving loan, consider these advantages and potential downsides:

Benefits:

Quick access to funds when you need them
Fixed interest rates and predictable monthly payments
Potentially lower interest rates than credit cards
Flexibility to use funds for any moving-related expense
No need for collateral

Drawbacks:

Adding new debt during an already expensive life transition
Possible origination fees (typically 1-8% of the loan amount)
Higher interest rates for borrowers with lower credit scores
Monthly payments that could strain your budget in your new home

Bankrate provides calculators that can help you determine what loan amount and term would fit your budget. Planning ahead and understanding the total cost of the loan, including interest and fees, can help you make an informed decision.

Conclusion

Moving loans can provide valuable financial support during a costly relocation. By carefully comparing lenders, understanding the terms, and borrowing only what you need, you can manage moving expenses without depleting your savings. Remember that while these loans offer convenience, they also create financial obligations that follow you to your new home. Consider alternatives like saving in advance, negotiating with your employer for relocation assistance, or selling unwanted items to reduce the amount you need to borrow. With proper planning and research through resources like NerdWallet, you can find the right financial solution for your move and start your new chapter on solid financial footing.

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This content was written by AI and reviewed by a human for quality and compliance.