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Should you get a personal loan for moving expenses?

By Tara Mastroeni
Published  December 17, 2020 5:36am CST
Personal Finance
Sponsored by Credible, which is majority owned by our parent, Fox Corporation. Credible is solely responsible for its services.
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Moving soon? Here’s how you can cover the big expenses that come with relocating. (iStock)

There's no denying that moving can be expensive. Between the cost of buying packing supplies, hiring professional movers, and traveling to your destination, covering moving costs can be a struggle for many people.

Fortunately, there are options to help ease the financial burden. In particular, personal loans for moving expenses can be a good option. In order to take full advantage of a personal loan, you're going to want to find the best rates and loan terms for the loan amount you want. Online marketplace Credible makes fast funding simple — just enter your loan amount and find rates starting at 4.99% APR instantly.

If you need help covering relocation expenses, keep reading to learn more about the loan resources available to you.

Should you get a personal loan for moving expenses?

Regardless of its purpose, it's important to note that there are always going to be pluses and minuses to borrowing loan funds. With that in mind, we've laid out some pros and cons to taking out a personal loan below. Here's what you need to know:

Pros

  1. You don't need collateral: The biggest advantage of taking out this type of loan is that it will likely be an unsecured personal loan. In general, you don't need collateral to take out unsecured loans, so you won't need to tie the loan into your home or another asset.
  2. Monthly payments are manageable: Personal loans often offer competitive rates, especially when compared to credit cards, which means there's a good chance that your monthly payments will be more manageable.
  3. Multiple repayment plans: These days, it's possible to find personal loans with a wide variety of payment options.

Multi-lender marketplace Credible can show you a variety of debt consolidation loans, offering loan amounts as low as $600. Just enter your desired amount and find your rate instantly (with no impact on your credit score).

HOW TO PREQUALIFY FOR A PERSONAL LOAN

You can use a personal loan calculator to find out what your monthly payment could be at a variety of different loan amounts.

Cons

  1. You have limited options with finances: Since personal loans are often unsecured, being approved for one largely depends on your income and credit score. As a result, there may be limited options for those with bad credit.
  2. There are potential additional costs: Also, it's important to consider the total cost. On the one hand, some personal loan lenders do charge fees to take out a new loan. On the other, you will have to pay interest charges, which can also add to your bottom line.

How to qualify for a personal loan

As we said, your income and your credit score are the two biggest factors that help decide whether you'll be approved for a personal loan. In fact, there is often a minimum credit score requirement that must be met.

Notably, in order to determine whether you meet that requirement, your lender will often pull your credit, which can temporarily harm your score. If you're unsure whether your credit history is solid enough for you to qualify, it may be a good idea to find a lender that does a soft credit check instead of a hard pull.

In addition, sometimes your loan purpose is also considered when weighing your application. For example, in order to get a home improvement loan, you must pledge to put the funds toward renovations.

When it comes to personal loan shopping, Credible can do the heavy lifting for you. With the click of a button, you can view multiple lenders, rates, and terms in one spot. Get a jump start on your personal loan shopping today.

CAN YOU GET A PERSONAL LOAN WITHOUT A CREDIT CHECK?

How to get the best personal loan offer

Keep in mind that every lender will offer different loan rates and fees. To that end, in order to secure the best loan offer, it's important to compare lenders. If you don't want to waste time doing tons of research, you can use Credible to help you compare rates and lenders from the comfort of your own home.

Additionally, while it will be harder to get a competitive loan with bad credit, it's not impossible. Often, you can opt for a secured personal loan and rates will be lower than what you would be offered otherwise. As a reminder, a secured personal loan is tied to a form of collateral like your home or a car.

Other options to pay for moving costs

Lastly, in the event that you don't think a personal loan is right for you, there are some alternative options.

Get a 0% APR credit card 

As the name suggests, a 0% APR credit card allows you to avoid paying interest on any existing balances for a set period of time.

That said, if you're going to go this route, managing money is important. For best results, you’ll need to be sure that you have enough money in your checking account to pay off the existing balance before the 0% APR period is over. Otherwise, you may have to contend with substantial interest charges. However, as an added bonus, paying your balance off on time can help you build credit by lowering your credit utilization rate.

You can visit an online marketplace like Credible to help you view all of your 0% APR credit card options at once.

HOW DO SMALL PERSONAL LOANS WORK?

Save up 

If the loan calculators show you that you cannot afford to get a personal loan to cover moving costs, your other option is to save up toward these expenses. It may take a while, but you'll be able to achieve your goal without adding to your overall debt.