Moving Loans: Everything You Need To Know

Whether you’re renting a truck and doing the heavy lifting yourself or hiring professionals, moving costs can add up quickly, especially if you’re moving a significant distance. Moving loans are commonly floated as a way to help people finance relocating.

But what exactly is a moving loan? Should you consider getting one? We’ll explain what moving loans are, their strengths and weaknesses and suggest some alternatives to help you decide for yourself.

What Are Moving Loans and How Do They Work?

Moving loans, also referred to as relocation loans, are personal loans used to cover moving expenses. Personal loans can be used for many things and often get described by what the funds will be used for.

Personal loans are usually available in amounts ranging from about $2,000 to $45,000. The way they work is straightforward: A borrower will apply for the loan, and the lender will either approve or deny the application.

Moving loans are typically unsecured personal loans. That means that there’s no collateral required to receive the loan. The lender will approve or deny the loan solely on the strength or weakness of the application.

Assuming the application is approved, the funds will be transferred to the borrower in a lump sum, meaning they’ll get all the money at once. Upon receiving the funds, the borrower is free to spend it on whatever they need. In the case of a moving loan, this is likely moving equipment or movers.

After receiving the money, the borrower will be responsible for paying the loan back. This is usually done via a monthly payment, and the length of the repayment period depends on the loan terms.

How much do moving loans cost?

The true cost of borrowing money is determined by the annual percentage rate (APR). This combines lender fees with the interest rate that the borrower will pay.

Lender fees can vary widely from lender to lender. The interest rates on a personal loan are usually higher than for a mortgage but lower than the interest rates you’ll see for credit cards.

What Are the Pros and Cons of Moving Loans?

To help you decide if a moving loan makes sense for your situation, we’ve put together a list of pros and cons.


✅Flexible use of funds

Flexibility is one of the biggest draws of a moving loan. You can use the funds to cover any aspect of your moving expenses, from renting the truck to paying movers to gas money.

✅Quick turnaround

Most lenders can provide moving loans in less than a week and sometimes within 1 business day.

✅Lower interest rates

Typically, these loans offer lower interest rates than what’s available with credit cards.

✅Predictable to budget

Because you can determine the repayment period, you can control how much your monthly payment will be. That makes it easier to select a repayment schedule that fits your budget.


⛔Potential to overborrow

Because the funds from a moving loan are so flexible, it can be tempting to borrow more than you need. This leads to paying more in interest over the life of the loan and can make keeping up with your monthly payments harder.

⛔Hard minimums

Most personal loans come with a minimum of around $2,000, meaning you can’t get one worth less than that. Depending on how much cash you need for your move, you may not want to borrow that much.

⛔Could damage your credit

If you can’t repay the loan, you’ll wind up causing significant damage to your credit score. Make absolutely certain you can afford to repay the loan before taking it out.

What Are the Alternatives to Moving Loans?

If a moving loan isn’t the best option, there are other ways to get money to cover the cost of your loan, including employer reimbursements, grants and paying out-of-pocket.

Moving expense reimbursements

If you’re moving for work, some employers may offer relocation reimbursements to help you cover the costs of your move. These can be done through a lump sum payment, a reimbursement after the relocation or your employer paying movers and other vendors directly.

Sometimes, this is negotiated as part of your benefits during the hiring process. However, It’s still worth asking your employer if they offer anything when you need to move for work, even if you didn’t discuss it during the initial negotiation.

Credit cards

Depending on the amount you need to cover your move, you may be able to put it on your credit card or cards. This can be convenient – no application process, just swipe your card and go.

Keep in mind that credit cards have higher interest rates compared to loans. The longer you carry a balance on your credit card, the more you’ll pay in interest, so it’s a good idea to use your card responsibly.

Some credit cards have zero or low-APR introductory offers. If you can take advantage of this period you may be able to pay less in interest. However, these offers usually only last 6 – 24 months.

Also, be wary of using your credit card at the ATM. You can take out a cash advance, but it will cost you.


If you know that you’ll be making a move, try to set aside money in advance to cover your moving expenses. You can do this by committing to save a certain amount of money each week or each month and putting it into a savings account.

You can also look for ways to save before you move by canceling subscriptions, cutting back on regular expenses and putting the difference into your savings account.

Selling your stuff

If you have items that you don’t plan to take with you or that just won’t fit in with your new digs, selling these items can put some extra cash in your pocket to help cover expenses.

Final Thoughts on Moving Loans

Ready to make a move, but not sure how you’re going to afford it? You have options. Whether you take advantage of a moving or relocation loan or get your funding through another source, making a big move is possible. You just need to do a little planning and make sure you don’t overextend yourself financially.

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