Relocation Loans to Cover Moving Expenses in 2023

Expenses surrounding moving costs can add up quickly. If you are in need of financing for an upcoming move, you have options. One of these options is relocation loans, also known as moving loans.

In this guide:

What is a Relocation Loan?
Moving Loan Options
Benefits of Using a Moving Loan
Risks of Using a Moving Loan
Alternatives to Using Relocation Loans

What is a Relocation Loan?

Simply put, relocation loans are used to cover moving expenses. There are several types of relocation loans available, and they differ depending on the bank or financial institution offering them.

For example, some relocation loans are intended to help you close on a new home or pay for a security deposit on a new apartment. The only catch is that the start date for your new job — if that’s your reason for moving and applying for the loan — must be before your first loan payment is due.

For many banks, a moving loan is essentially an unsecured personal loan used for moving expenses. As long as you have a good credit score and stable income, chances are you can qualify for a personal loan to cover the costs of your move.

If your credit report has a few blemishes, you may still be able to qualify for an unsecured personal loan, although you’re likely to face higher interest rates as a result.

No matter what route you take, a relocation loan can help ease some of the financial stress that comes with a move. The loan terms, rates, and conditions can vary widely, so it’s a good idea to look into several different lenders before signing on the dotted line.

Moving Loan Options

If you’re interested in taking out a moving loan, here are some lenders you can consider:

Company	Rates	Loan Amounts
Upgrade	7.99% – 35.97%	$1,000 – $35,000
Upstart	8.27% – 35.99%¹	$1,000 – $50,000²

Upgrade

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Rates (APR): 8.49% – 35.99%
Loan Amounts: $1,000 – $50,000
Credit Score: 580+

If you only need a small loan to finance relocation expenses, Upgrade is a great option. The application process is easy and you can check rates without affecting your credit score. They also make personalized loan recommendations to all its customers.

Credit score category: Fair, bad
Soft credit pull to check rates: Yes
Deposit time: As soon as the next day
Origination fee: 2.9% – 8%
Late fee: $10
Repayment terms: 36 or 60 months

Upstart

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Rates (APR): 6.12% – 35.99%
Loan Amounts: $1,000 – $50,000
Credit Score: 580+

Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and many other variables when determining eligibility.³ This model leads to 27% more approvals and 16% lower rates than traditional models.⁴

Credit score category: Fair, bad
Soft credit pull to check rates: Yes
Deposit time: As fast as one business day
Origination fee: 0% – 8%
Late fee: $15 or 5% of payment
Repayment terms: 36 or 60 months

If you want to compare other options, you can check out our guide to the best personal loans.

The Benefits of Using a Moving Loan

According to the American Moving and Storage Association, the average cost of an intrastate move is $2,300. To relocate to another state, the average cost is $4,300. If you don’t have this kind of money on hand, a relocation loan could help you out.

The biggest benefit of taking out a relocation loan is that it can ease some of the financial burdens associated with moving. For example, it may enable you to hire movers instead of having to do it all yourself. It could also help you cover relocating costs that aren’t covered by a new employer. You’ll also benefit from fixed monthly payments for the life of the loan, and some lenders offer interest rate discounts with autopay.

Taking out a relocation loan is usually a better idea that financing your move on using credit cards, which often have much higher interest rates and less flexible repayment terms than personal loans.

The Risks of Using a Moving Loan

Anytime you take on new debt, there are risks involved. Taking out a moving loan means you are taking on additional debt as you’re trying to establish yourself in a new location, which can cause added anxiety during an already stressful time.

Your relocation loan could cause your debt-to-income ratio to be higher than some lenders would like. This could cause problems if you’re trying to take out a mortgage on a new home. If a lender does a hard credit pull right away — versus doing a soft inquiry to pre-qualify you — and you don’t end up getting approved, you’ve added another ding to your credit for no reason.

If you’re moving to a new city, the cost of living expenses could be higher than what you’re used to. If you find that your budget is stretched too thin, this could make it difficult to maintain timely payments on your relocation loan.

Alternatives to Using Relocation Loans

If you aren’t sure about taking out a relocation loan, there are other options available. For example, you could finance the move on a credit card with a 0% introductory APR offer for a fixed period of time.

So long as you’re able to pay off the balance in full before the term limit is up, you can avoid incurring interest charges — and, if it’s a rewards credit card, you could even end up earning some cash back.

If you don’t want to take out a loan through a bank, you could see if your moving company offers financing options. Just make sure you understand the terms and conditions so you aren’t caught off-guard down the road.

Final Thoughts on Relocation Loans

There are advantages and disadvantages to taking out a moving loan. You’ll have to decide whether it’s the best choice for you based on your personal situation and your own financial means.

Take the time to estimate your moving costs, expected income, and cost of living in your new location. This should help you determine whether a relocation loan is right for you. If you decide to take one out, be sure to evaluate your personal loan offers so you can find an interest rate and monthly payment that works with your budget.

Didn’t know that a personal loan could be used for relocation expenses? Find out what else a personal loan can be used for.

Recap of Relocation Loans

Company	Rates	Loan Amounts
Upgrade	7.99% – 35.97%	$1,000 – $35,000
Upstart	8.27% – 35.99%¹	$1,000 – $50,000²

¹The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

²Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.

³Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

⁴Approval numbers compare the 2020 loan approval rate by the Upstart model and a hypothetical traditional credit decision model. The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical traditional model used in Upstart’s analyses was developed in connection with the CFPB No Action Letter access-to-credit testing program, is trained on Upstart platform data, uses logistic regression and considers traditional application and credit file variables.