4 Personal Loans for Moving Expenses in 2020

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Moving loans: Pros and cons

Before you take a personal loan for moving or any purpose, weigh these pros and cons.

Pros

• Lower rates than credit cards. If you have good credit, you may get a lower rate on a personal loan than on a credit card. The estimated rate for borrowers with excellent credit is 13.9%, according to our personal loan calculator.
• Fast funding. Some online loans fund as quickly as one business day. Ensuring you submit a complete application along with all the required documents can speed funding.
• Large loans. If you anticipate an expensive move, a personal loan — with amounts up to $75,000 — can be better than maxing out your credit cards.

Cons

• Long-term debt. You’ll likely be paying for your move long after you’ve settled into your new home, since loan terms on personal loans can extend up to five or seven years.
• Fees. Some lenders charge origination fees that can range from 1% to 6% of the loan amount. The fee is included in the annual percentage rate and may be subtracted from the loan proceeds. For example, a $5,000 loan with a 5% origination fee ($250) would net you $4,750.
• High rates for bad credit. If your credit score is poor, a personal loan can be expensive. Rates for bad credit loans range from 16% to 36% APR.

Alternatives to moving loans

Credit unions: If you need a smaller loan and have time to shop around, consider joining a credit union. Federal credit unions have borrowing amounts starting at $500, and they charge a maximum APR of 18%.

Credit cards: Borrowers with excellent credit may qualify for a 0% APR credit card, which charges zero interest if you pay off the balance within a promotional period.

Friends and family: Getting a loan from family or friends is an option that has benefits like no or low interest, but it can also strain your relationship.

Sell your stuff: Do you really need that piano? Selling larger items like a couch or pool table puts cash in your pocket and reduces moving costs. List items for sale on Facebook or Craigslist, or hold a moving sale.

» MORE:  4 ways to reduce moving expenses

How to qualify for a moving loan

Borrowers with strong credit have the best chances of qualifying for a moving loan, although requirements such as credit score and income vary by lender. Building your credit and improving your debt-to-income ratio are good ways to boost your chances of qualifying for a moving loan.

Most online lenders allow you to pre-qualify to check your rate and terms before committing to a loan. Pre-qualifying allows you to compare rates from multiple lenders and find a loan that gives you the amount of money you need and a payment you can afford.

» MORE: Pre-qualify with multiple lenders on NerdWallet