Are personal loans a good option for moving costs?

Moving for a new job opportunity or simply for a change of scenery isn't always cheap. , the average price of a local trip is $1,250, and the average price of a long-haul trip is $4,890.

The actual amount you pay for a move depends on several factors, including:

• How far you go
• How much do you have to move?
• Whether you hire professional movers or go DIY instead
• Whether you need to temporarily put any of your items into storage

The total moving budget for a local move may include renting a truck, paying movers (or having friends help out), buying boxes and packing supplies, and paying temporary storage fees. Moving across the state or across the country can add other costs, such as shipping fees for larger items or travel costs for you and your pet.

When planning your moving expenses, one thing to consider is how you will pay for it all. If you prefer not to empty your cash, a credit card may be an option. , but may be a better option. If you're not sure where to look for loans, consider these options.

Transfer of loans from banks and credit unions

The first place you can look for a personal loan for moving expenses is your bank or credit union. Both can offer personal loans or help cover moving costs or any other expenses. The difference with a line of credit is that it's usually revolving, meaning you can draw against it as needed. A personal loan will give you a lump sum of cash for your moving expenses.

If you have some banking history and good credit, it may be easier to get a personal loan from a bank or credit union. Both can help you qualify for a lower interest rate on a personal loan, and some banks sweeten the deal by offering relationship discounts on loan rates.

In terms of cons, one of the biggest might be speed. Getting a loan from a bank or credit union can be a slower process than getting a personal loan online. Loan approval and funding may take several days, which may not be convenient for your moving schedule.

Another potential drawback is that if you don't have great credit, banks and credit unions may require you to make some kind of offer for a personal loan. For example, you may have to pledge some of the money in a savings account or CD to secure the loan. If you don't have these assets, it may be more difficult to find a bank that will approve you with poor credit.

Transferring loans from online lenders

If you are looking for a personal loan for moving expenses for several reasons, online lenders are an attractive option.

1. First, online lenders provide personal loans to people with extensive credit experience. There are personal loans for people as well as personal loans for people with bad credit. In this sense, getting a personal loan through an online lender can be easier than getting a loan through a bank or credit union.
2. Second, personal loans from online lenders are usually unsecured. This means you don't need collateral to get a loan, which is again an advantage you can't necessarily use with a bank loan.
3. Another advantage is related to loan conditions and interest rates. Online lenders can offer generous loan amounts; For example, SoFi offers personal loans up to $100,000. Even if your move doesn't cost that much, it's good to know you can access that amount of financing if needed.
4. Interest rates from online lenders are also competitive with what banks or credit unions offer, and they can be lower than what you'd pay to pay off a credit card transfer. The average credit card interest rate on accounts is around 17%, which is much higher than the rates you'll find with online lenders. For example, with LightStream, it is possible to get personal loans with interest rates as low as 6.94% with automatic payments.
5. Getting a personal loan online can also be fast and convenient. With some lenders, it is possible to complete an application in a few minutes, receive an approval decision the same day, and receive a loan within a day or two. This can be important if time is of the essence for an action.

One thing to keep in mind when borrowing from online lenders is that the best rates are usually for people with the best credit. If you have one, the APR can easily cover the amount the credit card can charge. Paying attention to fees is also important as some online lenders charge a disbursement fee for personal loans.

Alternatives to using a personal loan to move expenses

There are other ways to pay for moving costs instead of a personal loan. For example, you can:

• Use a 0% interest credit card
• Borrow from friends and family
• Take advantage of reimbursement or relocation benefits through your employer
• Reduce your shipping costs and use the savings to cover expenses

Also, think about how you can find extra cash to pay for a move. For example, if you're decluttering before you move, you can sell items you plan to donate or throw away. Another way to save is to ask for discounts.

For example, moving truck rental companies may offer discounts if you belong to certain membership programs, such as AAA. Some offer loyalty rewards programs that allow you to earn discounts when renting trucks.

What to do next when planning your move

If you've decided to use a personal loan to pay for a move, keep these tips handy:

• Add your moving budget so you know how much you need to borrow.
• Check your score to get an idea of ​​which loans you may qualify for.
• Compare interest rates, fees, credit limits and repayment terms for different personal loan providers.
• Estimate the monthly payment amount for different personal loan options.
• Plan your budget after you move to pay off loan payments.