Moving & Relocation Loans

PROS

• According to Jennifer Hunter, assistant director of the Family Consumer Sciences Extension at the University of Kentucky in Lexington, a personal loan can help you manage cash flow for the entire moving process. With a personal loan, you can:
• Flexibility in how you spend: Although your lender will ask how you plan to use your loan, you can spend the money as needed. That means if you have an unexpected expense during your move, you could use loan funds to avoid dipping into your emergency fund (if you have one).
• Don’t have to put down collateral: Unless you opt for a secured personal loan, you won’t have to pull down collateral to get loan funds.

CONS

• High cost: Depending on your credit score, personal loans can come with hefty interest rates compared with secured loan options. And without a plan for repayment, a personal loan could trap you in debt.
• Impact on credit score: Barbara O'Neill, a CFP and instructor on personal finance at Rutgers University in N.J. points out that borrowing will impact your credit score, and you need to be ready for the consequences. Have a plan in place to repay move-related debt and rebuild your credit score.
• Compounding stress: Adding a financial concern to an already stressful process can drive anyone up those freshly-painted walls. If you’re going to borrow money, Hunter says, be strategic — use the funds to manage your cash flow and only borrow what you can pay back promptly.

• Budget for moving expenses

  Long distance versus local: If you are going to use a professional mover, the cost will likely be based on the size of your shipment and your destination. Many local movers will base their costs on hourly work. For longer hauls, relocation companies consider the cubic feet and weight of your household goods, as well as the distance.

• Get an estimate:

  If you search online for moving estimates, many companies will ask for an estimate of the size and weight of your items, and many people may not know how to answer those questions. Steve Feeney, who heads the household goods department for CFR Rinkens, a global relocation company, suggests that consumers find a moving company with online estimation tools. The tools take users through an inventory of their household goods and furniture to generate an estimate of size and weight, and then a possible price estimate for the relocation.

• Shop around for moving companies:

  Just like shopping for a new car or insurance, it is a good idea to contact several moving companies and inquire about their rates. Depending on the size and distance of your move, it may be more economical to pay a local company for an hourly move, compared with engaging a national carrier for a cross-country move.

• Seek an in-home estimate:

  For an even more precise quote, Feeney says many moving companies will come to your home and do an in-person inventory and generate an estimate based on that.

• Survey your goods to help with budgeting:

  The heavier the items, the more expensive they are to move, Feeney notes. That includes books, tables, sofas, beds, bookcases, cabinets and pianos. If homeowners can sell or donate these bulky items, it would help lower their moving costs, he said. “It might be less expensive to buy the same thing again in your new location,” Feeney said.

• Get a written quote:

  If you do hire a professional mover, make sure you get an estimate for the charges in writing. Some movers will guarantee that rate for up to two months. “Hopefully that will eliminate a lot of surprises,” Feeney advised. “That’s one of the most important things you can do.” Other ways to budget for moving and avoid debt Perhaps the best way to contain costs is to be resourceful and self-reliant. Here are some tips to shave expenses and stay on budget.

• Select a quiet month or day for your move:

  If you’re going to hire a professional mover, the timing of your move can help save money. The summer months tend to be the most popular time to move, which can drive up costs of vans and movers. If you have flexibility, consider moving during other times of the year. The day of the week can even play a factor. One major relocation company suggests moving on a Tuesday, which is the least popular day and could lower costs.

• Borrow vehicles for moving day:

  When it comes time to haul your possessions, try to use a borrowed pickup truck or minivan. If you are relocating to another area, ask friends and family if you can stay overnight and save on the cost of hotel rooms.

• Upcycle and borrow supplies:

  Rather than buying moving supplies, look for recycled boxes at retailers or online. Many grocery stores and liquor stores will give you boxes and U-Haul offers gently-used boxes. Rather than shelling out for tape and packing materials, see if friends and neighbors have any supplies left over from their own moves. Skip pricey Bubble Wrap by using towels, linens and clothes to brace fragile items.