How To Finance A Long Distance Move

How To Finance A Long Distance Move

Moving can cost a huge amount of money. But the exact cost will be based on how far to your new home and the number of goods you own and moving. Whether you are moving around the town or to another side of the country, moving is an expensive life event that needs enough financial planning.

A short move as stated by the Home Advisor will cost around $700 to $5,000, while you should prepare from $4,000 to $10,000 for a long-distance move.

Why is the moving cost so expensive?

The reply to that is due to many variables. You have to pay for costly moving equipment and pay for the wages of your expert movers. Add the cost of insurance as well as the cost of paying for gas and your moving cost will cause you to consider finding out how to fund a move.

If you don’t have any alternative other than to relocate before you have money to pay for it, you can consider relocation loans.

How to Pay for a Move

If you feel like you won’t be able to cover payment for your move, then it will be in your best interest to find out that there are 3 ways to manage a highly expensive move:

  • Save up and make a cash payment
  • Get a personal loan
  • Pay using a credit card
  • And so on.

While the first is the safest and most affordable of the options, it is not usually realistic, especially if your timeline is very tight. All options present different pros and cons. Continue reading to find out more about the varieties of ways to finance your move.

How to Finance your Move

There is no payment option that is the best for every individual or situation, and the perfect choice for you will be based on variables like your credit history, your income, and the amount of time you have in advance of your move.

To get your research started, we’ve compiled a few different financial cases so you can determine the best one that fits your situation the most, and fast.

1. Save up and make Cash Payments

Everyone with a credit card, student loans or mortgage knows that it is best to avoid debts anytime possible. And if you have time to save up a lot of cash in advance of your moving day, you don’t have to enter debt for your move.

As discovered in a recent survey we had about the funding for moving, 40.4 percent of those surveyed mentioned that they make cash payment for their move (the commonest payment option).

While it may need a few months of proper budgeting and frugal living, the convenience and peace that come from paying for your move and completed with immediately your moving boxes are unloaded are worthwhile.

Also, there are moving companies that offer discounts to their customers who make cash payments upfront. While these discounts are not huge, each bit helps when you are spending your savings to pay for the move.  

Pros ✔

  • No interest or continuous debt
  • Possible discounts for moving services

Cons ✖

  • Time and planning are necessary

2. Get a Personal Loan

If you are performing an emergency move, then you are likely not to have enough time to save up a lot of money you need to pay for your moving costs. But if you have a great credit score, and you can make monthly payments consistently, you may be able to get a low-interest personal loan.

Even though interest rates and highest borrowable amounts will differ depending on the lender you choose and your credit history, this option is preferred to paying with a credit card.

Just 3.5% of those we surveyed said that they make their moving cost payment by obtaining loans. This may be as a result of the improved familiarity of people (and maybe more comfortable) with credit card debt.

If you feel like taking a loan is the ideal option for you, but you don’t know how to get a reliable lender, we recommend that you check the list of personal loans for relocation costs by NerdWallet.

Pros ✔

  • Interest rates are lower than credit cards
  • Easy budgeting assured with the fixed payment schedule
  • Instant funding

Cons ✖

  • Varied rates based on the lender
  • Huge fees for missed payments
  • Possibility of affecting your mortgage approval

Getting a loan for a move, in disguise as a personal loan, can be a helpful alternative to finance your move. There are two different types of personal loans: secured loans and unsecured loans.

Unsecured loan: This type of loan doesn’t need collateral. Lenders may offer this loan to customers depending on various factors like:

  • Your credit score: Credit scores assist lenders to figure out the risk level of lending to you as a borrower. A higher credit score assures more possibility of being qualified for lower rates on interests and higher amounts of loan.
  • Your income: Lenders help figure out whether customers would be able to repay the loan with this information.
  • Your debt-to-income ratio: This ratio shows your existing owing debt to your monthly income. A lower ratio in this case is better.

For repayment of an unsecured loan, there are fixed monthly payments and interest rates until final payment.

Secured loan: What is your credit? Is it bad or you are having none at all? If your credit score is low, your only option might be a secured loan. Unlike an unsecured loan, you will need to present collateral that is of the same value as the loan amount you hope to get.

Popular examples of collateral are your car, home, or savings account. To pay back a secured loan, you will need to make fixed monthly payments for the entire validity of the loan.

Lenders of a secured loan sometimes provide good terms and rates than an unsecured loan, so you should look into the two options before you decide.

3. Pay using a Credit Card

Credit cards have higher interest rates than moving loans and are usually the costliest way to pay for your moving cost. However, if you don’t have a high credit score enough to get a loan and your time can’t be enough to save up, a credit card might be your best bet. You may be able to prevent the financial trap of a huge interest rate if you manage to be approved for a new card with a 0% APR promo.

You won’t be charged any interest rate inside the promotional period when you have a card that has an introductory 0%APR, and this can last from six to twenty-one months after opening your account.

If you are approved for a new credit card that doesn’t charge any interest for 12 months and pay for your move with it, you will be required to pay just the principal amount you borrowed since you pay up everything within the 12-month window.

However, there will be accruing interest and at a normal rate on any debt left on the card after the promo period is over. Some cards may add that interest rate directly to your whole initial balance (known as deferred interest) even if your balance is just a penny.

This is why this mode of payment is only recommended to those who can earn just enough money to pay for the quantity of credit they use, and fast. Even with the possibility of dangers of credit card debt, 29.6 percent of our audience said that they use credit cards to pay for their moves, making it the second most common mode of payment after cash.

Pros ✔

  • Fast and easy payment

Cons ✖

  • Convenient fees
  • Highest interest rates
  • Possibility of affecting your mortgage approval

Other methods to move in a budget

Apart from getting a loan or credit to help fund your move, which we mentioned above, below are some methods to assist you to save money when you are moving:

Host a garage sale:

Selling your belongings can assist you to gather some additional money for the relocation and greatly help cut back and reduce transportation costs.

Check through your entire belongings, and figure out the ones you don’t need or cool with giving away. Ensure they are still in perfect shape. Your leftover items from the sales should be donated to a charity and in return claim as a tax deduction.

Wisely plan the time:

There are moving services that offer cheaper rates during the less-demand season or an off-peak weekday. So, make sure you do your research regarding this and plan your move based on it.

Compare rates:

Look into all moving options like a moving company, DIY, moving truck rental, and storage pod shipping services. Research and make rate comparisons to find out which option would be the most economical for you. If you choose to select a moving company, make use of Adams Van Lines which will enable you to prevent a sudden price increase

Save on packing supplies:

Avoid buying boxes. Instead, go to liquor stores and shops to collect their leftovers from their previous shipment. Ask if your neighbors or friends have boxes left from their recent move that you can use.

Check employer moving packages:

If you are moving because of a new job, find out if your future employer offers a moving package. Although the figure varies over companies, the package can help your finances by covering a part of your moving costs on the minimum.

You need to importantly note that you need to carefully read your moving package agreement. Employers usually expect you to pay your compensation back if you leave the company earlier after the move.

Employer assistance:

Ask your employer to finance your move if your relocation is because of a new job. If they are not willing to, offer them something to trade with, such as one week of paid vacation, to pay for the cost. Your new employer may not be willing to pay for the entire move but ready to cover part of it.

Make money:

Sell all the extra items you have been hoarding around for long and finance the move with the money. As a rule, if you have a six-month unused belonging, you likely will not miss it. Also, the move will become cheaper with fewer belongings.

Use your savings:

If you have money stored aside in a savings account, the best time to put it to use is now. You can always gather up your savings immediately you are settled in your new location.

Final Words

You should also understand that there is no perfect solution to funding a move. Your decision on the method of financing a move can involve two or more of the six common methods of financing an interstate move we have discussed in this write-up.

For instance, you can go for a personal loan to cover most of the moving cost, and then pay off the relocation bill by placing a small portion of the bill on a revolving credit card. If you are getting ready for a long-distance or cross-country move, then you can get moving quotes from the Adams Van Lines.

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