Best Moving Loan with Bad Credit
A moving loan is a personal loan used to finance relocation expenses. While traditional lenders may hesitate to approve loans for individuals with poor credit histories, several online lenders and credit unions offer products designed for such borrowers. These loans typically come with fixed interest rates and repayment terms, allowing borrowers to manage their finances more predictably.
Top Lenders Offering Moving Loans for Bad Credit
1. Avant
Credit Score Requirement: 550 or higher
Loan Amount: $2,000 to $35,000
APR Range: 9.95% to 35.99%
Loan Term: 2 to 5 years
Avant is known for providing personal loans to borrowers with fair to bad credit. While their interest rates can be on the higher side, they offer quick funding and a straightforward application process. Additionally, Avant allows you to check your loan options without impacting your credit score.
2. Upgrade
Credit Score Requirement: 580 or higher
Loan Amount: $1,000 to $50,000
APR Range: 7.99% to 35.99%
Loan Term: 2 to 7 years
Upgrade offers personal loans that can be used for moving expenses. They provide flexible loan terms and the option to prequalify without a hard credit inquiry. This feature allows you to compare loan offers without affecting your credit score.
3. Universal Credit
Credit Score Requirement: 580 or higher
Loan Amount: $1,000 to $50,000
APR Range: 11.69% to 35.99%
Loan Term: Not specified
Universal Credit is another lender that caters to individuals with less-than-perfect credit. They offer personal loans with competitive rates and flexible terms. Their application process is user-friendly, and they provide quick access to funds.
4. OneMain Financial
Credit Score Requirement: Varies (no minimum specified)
Loan Amount: $1,500 to $20,000
APR Range: 18.00% to 35.99%
Loan Term: Not specified
OneMain Financial offers personal loans with fixed rates and fixed payments, making it easier for borrowers to budget their monthly expenses. They provide access to larger loan amounts, which can be beneficial for covering extensive moving costs.
5. PNC Bank
Credit Score Requirement: Varies (no minimum specified)
Loan Amount: $1,000 to $35,000
APR Range: Not specified
Loan Term: Not specified
PNC Bank offers unsecured personal loans that can be used for moving expenses. They provide loans without requiring collateral and do not charge prepayment penalties, giving borrowers flexibility in repaying their loans.
Alternative Financing Options
If traditional loans aren't viable, consider the following alternatives:
Credit Cards: Using a credit card with a 0% introductory APR on purchases can help manage moving expenses. Ensure you can pay off the balance before the introductory period ends to avoid high-interest charges.
Personal Savings: If possible, using personal savings can be the most cost-effective way to finance a move, as it avoids interest and fees associated with loans.
Peer-to-Peer Lending: Platforms like Prosper connect borrowers with individual lenders, potentially offering more flexible terms. However, interest rates can vary based on your creditworthiness.
Nonprofit Organizations: Some nonprofits, such as the Mission Asset Fund, offer zero-interest loans to help individuals build or improve their credit scores. These programs often involve community-based lending circles.
Tips for Securing a Moving Loan with Bad Credit
Prequalify: Many lenders offer prequalification without a hard credit inquiry, allowing you to compare loan offers without affecting your credit score.
Consider a Co-Signer: Having a co-signer with better credit can improve your chances of loan approval and may result in better terms.
Opt for Secured Loans: Providing collateral can make it easier to qualify for a loan and may result in lower interest rates.
Improve Your Credit Score: If time permits, taking steps to improve your credit score before applying can help you secure better loan terms.
Why Choose a Moving Loan with Bad Credit?
1. Access to Necessary Funds
Moving involves various expenses, such as hiring movers, renting trucks, paying security deposits, and purchasing new furniture. If you lack sufficient savings, a moving loan can provide the necessary funds to cover these costs, ensuring a smooth transition to your new home.
2. Fixed Interest Rates and Predictable Payments
Many moving loans offer fixed interest rates and repayment terms, which means your monthly payments remain consistent throughout the loan period. This predictability can help you budget effectively and avoid the financial strain that comes with fluctuating payments.
3. No Collateral Required
Unsecured personal loans, commonly used for moving expenses, do not require collateral. This means you won't risk losing assets like your home or car if you're unable to repay the loan.
4. Potential to Improve Credit Score
Responsible management of a moving loan, such as making timely payments, can positively impact your credit score. This improvement can enhance your creditworthiness for future financial endeavors.
5. Quick Access to Funds
Some lenders offer fast funding, with loans disbursed as quickly as the next business day after approval. This speed can be crucial if you need to relocate promptly.
Considerations Before Applying
1. Higher Interest Rates
Borrowers with bad credit may face higher interest rates due to perceived lending risks. It's essential to compare rates from different lenders to find the most favorable terms.
2. Potential Fees
Some lenders charge origination fees, which can add to the overall cost of the loan. Be sure to inquire about any additional fees before committing to a loan.
3. Impact on Debt-to-Income Ratio
Taking on additional debt can affect your debt-to-income ratio, potentially influencing your ability to secure future loans or credit.
Alternatives to Moving Loans
Before deciding on a moving loan, consider these alternatives:
Credit Cards: If you qualify for a credit card with a 0% introductory APR, it can be a cost-effective way to finance moving expenses. However, ensure you can pay off the balance before the introductory period ends to avoid high-interest charges.
Personal Savings: Utilizing personal savings can be the most economical option, as it avoids interest and fees associated with loans.
Employer Relocation Assistance: Some employers offer relocation packages that cover moving expenses. Check with your employer to see if such assistance is available.
Family and Friends: Borrowing from family or friends can be a viable option, but it's crucial to have clear agreements in place to avoid potential misunderstandings.
Choosing a moving loan with bad credit can be a viable option to manage relocation expenses, provided you understand the terms and responsibilities involved. By carefully considering your financial situation and exploring all available options, you can make a decision that best supports your move and long-term financial health.
