How To Qualify For Moving Loans When You Have Bad Credit
Do moving loans exist for people with bad credit? In one word, yes. Moving can be an incredibly stressful and challenging time since you’re tasked with packing up your entire life and making a fresh start somewhere new.
The difficulty of moving is intensified if you’re short on funds to pay for movers, transportation, packing supplies, and everything else.
Learn how you can get a loan for moving with bad credit, and the associated advantages and disadvantages.
Moving Loan: What Is It?
A moving loan is a type of personal loan that assists you in everything related to your move. That might be the hotels you need to stay in at night as you move your belongings across the country, the moving truck itself, and everything in between.
These loans fall under the category of personal loans and come in two types: unsecured and secured. Unsecured personal loans don’t take any collateral. The lender will decide your eligibility based on factors like income and your credit history.
Secured personal loans are guaranteed with a form of collateral. This might be your house, your car, or another asset. Lenders prefer loans because there’s less risk involved.
If you consider taking a secured loan, be sure you feel confident in your ability to meet monthly repayments. Otherwise, you might lose a very valuable asset.
Advantages And Disadvantages Of Moving Loans
Before choosing this serious financial option, it’s important to carefully consider the pros and cons.
- If you already have substantial arrears and you’re having trouble making monthly payments, it’s probably not the best idea to take on more
- If you miss payments, then your loan will be reported to a credit agency, which affects your score. A collection agency will need to gather the money from you
- If you don’t have a great financial history, you’re likely to have high interest rates
- Hidden fees like repayment penalties or an origination fee may add significantly to the overall cost of your loan
- These loans have a quick application process. Most borrowers will be able to secure a personal loan within a week and see funds in their account shortly after that
- Loan terms will vary, typically ranging from 12 to 84 months
- Fixed monthly payments make sticking to a budget easier
- If you take an unsecured loan, then you don’t risk losing any collateral
- If you have a good score and financial history, then your interest rates are more likely to be low
Is It Worth Getting A Moving Loan?
Moving loans for poor credit can certainly be helpful when you’re in a tough financial situation and need to relocate. However, many people are concerned about whether or not an additional loan will hurt their credit even more.
Applying for relocation loans for bad credit within a short time span can indeed hurt your rating. However, qualifying for a loan might improve your rating, as long as you make those monthly payments.
How To Apply For Moving Loans?
When applying for moving loans for bad credit, you’ll need to go through the following process:
- Determine how much money you actually need to relocate
- Identify the right type of loan (such as secured or unsecured)
- Find the right type of lender
- Check the lender's requirements like hidden fees, monthly payments, and other factors
- Carefully compare offers and read all the fine print
- Gather your documents and information like identification, Social Security number, and proof of income
Top 3 Lenders Offering Moving Loans
The top three lenders offering moving loans for bad credit include:
- SoFi: This lender promises no hidden fees, though you likely need a good score to qualify
- Avant: Offers loans between $2000 to $35,000 with fast approval
- Upgrade: Allows borrowers to apply online in minutes and review multiple loan options
Moving Loan Alternatives
Before diving into the world of bad credit relocation loans, you should consider all options available to you. Moving loan bad credit alternatives include:
- Peer-to-peer lending: This allows you to borrow directly from individual lenders funding smaller loans. Therefore, you can bypass institutions like banks
- Budgeting: If you have some flexibility, it might be more worthwhile to create a budget and try to save for your move, rather than taking out a loan
- Relocation package: If you’re relocating for a job, try to negotiate a relocation package with your employer to help ease the cost of moving
- Credit cards: If your card can support your moving requirements, it might be easier to use it to finance your move
Navigating a move is never easy, especially if you’re faced with a difficult financial situation. Carefully consider your options before taking a loan for moving with bad credit.
The more you educate yourself on moving loans and your options, the more empowered you’ll be to make a smart financial decision.