How to pay for moving expenses: 4 options to consider

Financing your move may be a necessity depending on how far you are going and how much you have. Whether it’s planned or unexpected, moving can put a dent in your finances. According to Angi, average local moves cost anywhere from $882 to $2,559. Meanwhile, cross-country moves can set you back by $10,000 or more.

If you’re moving for work, your employer may cover some of these costs. But even so, it’s still a good idea to explore different financing options like relocation or moving loans. Moving loans are personal loans that you can use toward moving expenses. These loans and other methods like saving, relocation assistance or credit cards can minimize stress and help you avoid unpleasant surprises.

How to pay for a move

While moving can be expensive, there are a few ways to get the money you need. And if you are careful about it, you may be able to avoid hefty fees and interest.

Save and pay cash

Best for those who have at least six months before moving.

Saving money for an unexpected move can be difficult. But if you know about the move months in advance, consider setting up a moving fund. That way, you minimize your need to take on debt to cover moving expenses.

To set up a realistic fund, research the cost of moving companies or trucks in your area. This will give you an idea of how much you’ll need. Next, divide the cost by the number of months until your move. For example, if your estimated cost is $3,000 and you’re moving in 12 months, aim to deposit $250 a month into a high-yield savings account.

Personal loans

Best for strong credit borrowers with an unexpected move or little money saved.

If you need to finance some or all of your move, applying for a personal loan may be useful. Most personal loans are unsecured, meaning they don’t require collateral. These loans have a fixed repayment term of two to seven years, depending on the lender.

The main benefit of using a personal loan for moving expenses is their interest rates. Personal loans have an average interest rate of 12.43 percent. However, borrowers with excellent credit scores, however, can secure rates under 11 percent.

By contrast, the average credit card interest rate is nearly 21 percent. Personal loan interest rates are also fixed, whereas credit card interest rates can fluctuate based on market conditions.

If you have poor or bad credit, however, think twice before taking out a loan. Though some lenders offer bad credit loans, these typically come with high interest rates and fees that can make your loan quite expensive.

Personal loans can be obtained from banks, credit unions and online lenders. The application process is usually easiest with online lenders, but overall personal loans are much quicker than other loans. It can take as little as one day to get a personal loan.

Credit cards

Best for those with expected or unexpected moves who need additional time to raise funds.

Credit cards offer revolving debt, which means that — unlike personal loans — you don’t have to reapply for credit when you need more money. One of the biggest downsides is that credit cards typically have higher interest rates than personal loans.

Let’s say you’ve crunched the numbers and expect your total expense to be $3,000. The largest monthly payment you can afford is around $100. A personal loan with an 11 percent APR and a three-year term will get you a monthly payment of $98.22. Over the life of the loan, you’ll pay around $536 in interest.

Most zero-interest credit card offers run from 12 to 21 months. If you could afford to pay around $300 toward your balance every month, you could benefit from a credit card because you wouldn’t incur any interest. If not, a personal loan offers a lower payment and saves more than $400 over the life of your loan. Plus, you can’t be tempted to swipe a personal loan at the department store and add to your debt.

Relocation assistance

Best for a work-related move.

If you’re relocating for a job, ask your new employer if it will cover some of your relocation costs. Some employers offer a relocation package, which reimburses some or all relocation expenses, as an incentive for you to accept a job. Alternatively, you can ask for a sign-on bonus or negotiate a higher salary, then use some or all of the extra funds to cover your moving costs.

Pros and cons of moving loans

Often, a move can pop up as an unexpected and sudden expense. When it does, a moving loan might be your only or best option. A move might even max out your credit card limits. With that in mind, there are some pros and cons to be aware of before taking out a personal loan to move.

Pros

• Can grant fast access to cash
• Rates might be lower than other options like credit cards
• Not depleting savings or emergency funds

Cons

• Taking on debt for up to years at a time for a single move
• Rates on a personal loan might be high, especially if you have bad credit
• Potentially high fees

The cost of moving

Moving costs differ based on whether you move in-state or out-of-state and the size of your house. Here are seven common expenses to help estimate what your move might cost.

1. Hiring movers. This is one of the most important expenses you’ll make because, generally, you get what you pay for. Angi found that hiring movers costs at least $1,700, on average, for the full service. Costs vary widely based on distance, location, how much you’re moving and if you need to add extra services.
2. Packing services. If you hire your moving company or someone else to pack up your home for you, you’ll have to deal with this cost. Angi says the average cost of packing services is $1,000 for packing materials and labor.
3. Boxes. If you don’t hire someone for packing service, you will need boxes. Boxes can generally be obtained for free from grocery or department stores. If you need containers for transporting fragile items, remember that durable plastic tubs, depending on the size, can cost more than $20 each.
4. Travel. Gas, lodging and food can add up quickly. And if you’re flying, it’s easy for a small family to rack up over $1,000 for a one-way domestic flight.
5. Storage. If your move takes longer than expected, you might have to store some of your belongings. The cost of a self-storage unit varies widely and depends on its size and location. For instance, a 10 feet by 10 feet unit can cost up to $175 monthly, while a 5 feet by 5 feet can cost up to $100.
6. Item replacements. Odds are at least a few things will be broken during your move. Remember to set aside some money to cover replacements.
7. Deposits and fees. It’s possible that you may have to pay early termination fees for services like cable or utilities. You might even have to put down a deposit for services at your new place before moving in.

Bottom line

Whether it’s through savings, using a personal loan, credit card or asking your employer for relocation assistance, there are ways to cover the expenses of a move without breaking the bank. However, it’s important to carefully evaluate each option and understand the full cost of each. You should account for your circumstances and financial stability before deciding.

If your move is scheduled to happen several months from now, you can avoid getting into debt by setting aside a little extra cash each month. But if your move happens unexpectedly, using a personal loan or a credit card can make this expense more manageable.