Packing up and moving across the country is no easy task. From organizing your belongings to packing, moving, and creating a new space at home, the entire process can be overwhelming.
The cost of a long distance move is not a cheap expense either. It may seem tempting to reach for a product that costs thousands of dollars. personal loan to finance the cost. But while it may be beneficial to some, credit is not a one-size-fits-all option.
I recently spoke with Jeremiah, a young adult who recently began a cross-country move from the South to the West Coast, and asked him about his experience paying to move from coast to coast.
Average cost of a long distance move
The average cost of an intercountry move can vary between $4,000 to $8,000. However, depending on the total distance traveled, the weight of your move, and the time required to move your belongings, costs may fall below these ranges or exceed them. This number does not include the cost of living in a different city. cost of living index – and only takes into account moving-specific expenses.
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When Jeremiah took the leap and packed up his life and moved to California this year, he said he wasn’t thinking about the loan because he was moving into another rental unit and had some savings. “A year ago I had saved a small nest egg for a possible down payment on a house,” he said. “This move was going to be for a rental, so I didn’t need that much money and could save to afford it.”
But he added that if he were to move again, he probably wouldn’t take out a loan if he had the same home, but he could see the appeal of getting one. low interest loan On top of cash for peace of mind.
“The idea of lending will make me a little more cautious about this move.” [or] less impulsive [or would] “Make me really think about all the reasons why I want this adventure,” he said.
How do I know when to get a loan for moving expenses?
Now may not be the ideal time to get a personal loan, especially if you have unstable or poor credit. Interest rates are currently at an all-time high, according to a report. Bank rate studyThe average rate is 11.47 percent and experts are unsure when the Fed will raise rates start lowering rates.
With the average rate so high, it’s possible that the interest accrual alone will outweigh the cost of moving over the life of the loan. However, except for those who qualify for the lowest rates and fees, taking out a personal loan may not be the best funding option right now.
If one good-excellent credit scoreIf you have a stable income and a strong credit history, then it may be worth pre-qualifying with a few lenders to see if rates are competitive enough to make a loan worth it in the long run.
How to finance unexpected moving costs
There will always be obstacles and unexpected costs along the way; Therefore, the best thing you can do is to be financially prepared for emergencies that may arise.
For Jeremiah, some of these situations couldn’t have been more unexpected. “Unfortunate unexpected costs incurred related to theft of advance shipments [or] “I have to send something to myself twice,” he said. “Luckily I could argue with Amazon or Ikea but if I bought too far in advance some returns or disputes went out the window.”
personal loan gold credit card It can be useful for financing emergency expenses, such as paying for stolen furniture, rather than trying to pay out-of-pocket for new furniture. However, never borrow more than you need and be careful about the rates offered to you; You don’t want to pay for that new sofa and TV for years.
It is always best to find out if the moving furniture company has a refund or replacement policy before making any financial transactions in case of an emergency or unexpected event.
Pros and cons of using a loan to pay for a move
As with any other financing option, using a loan to cover the cost of a move is both advantages and disadvantages. Whether it’s the right choice for you depends on your immediate needs, your financial situation, and whether your budget comfortably allows for future payments.
Peace of mind when emergencies arise
May help encourage careful spending
Can be used for furnishings, moving costs and non-discretionary expenses related to a road trip or longer flight
Lower interest rates are harder to approve
He may not have made any payments on the road for years.
Having to keep up with monthly payments to limit interest accruals and loan writedowns
When should a personal loan be considered to cover the cost of a move?
If you’ve exhausted all your other options and decided that a credit card might not be the best option for your financial situation, then it may be time to look at a personal loan.
However, this is only recommended for borrowers with good credit who meet all of the lender’s minimum application requirements. Otherwise, you may be offered very high interest rates and fees that could leave you financially behind.
How to find the best personal loan?
Find the best loan by comparing lenders as there is no universally accepted ‘best’ personal loan. best loan for you. Pre-qualify as much as you can and for as many lenders as possible to find out what the most competitive offer looks like for your credit situation.
What’s best for you will also depend on whether the lender offers benefits and perks to help you manage your balance. For example, it’s common to see banks offering an interest rate discount as a loyalty benefit for pre-existing customers, or credit unions offering a similar benefit for signing up for direct debit.