Unsecured personal loans such as signature loans and credit cards don't require collateral. That makes the loans easier to qualify for but much more expensive than other types of loans, such as home equity loans. Personal loans arranged through moving companies could feature interest rates exceeding 21 percent. Personal loans through banks and credit unions could exceed 10 percent, depending on your credit. Secured personal loans offer lower interest rates because they are backed by collateral. A car that is paid for with clear title can be used as collateral for a bank-issued personal loan, resulting in significant savings over unsecured loans. Vacant land and stocks and bonds are other examples of collateral.
Beware of Interest Rates
Credit Card Debt
Credit cards are perhaps the most popular form of personal loans. The application process is easy and same-day approval decisions sometimes are available when applying online. A credit card allows you to use the credit line as you please. Most moving expenses can be placed on credit cards, including truck rentals, hotels, gasoline or paying professional moving companies. Credit cards offer great convenience for moving, but if possible time your move so that you can afford to pay off the credit card when the bill arrives. That prevents accumulating credit card debt.
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Your credit score is a three-digit number ranging from 350-850. Privacy Rights Clearinghouse, a nonprofit consumer information company, reports that a credit score of at least 620 is needed for competitive interest rates on personal loans and other forms of credit. Scores of 720 or higher lead to the best rates.
Credit reports are available for free (see Resources). View and print your report by visiting the website. Then follow instructions included with the report to order your credit score separately, for a fee.
The fact that you may be borrowing money to leave town shouldn't affect your ability to qualify for a personal loan. Financial institutions have customers spread across the country, and your relationship with the bank will be just fine as long as you make timely payments and notify the bank about your new address. However, borrowing money to move could be an issue if your credit score is poor and you have a history of frequently moving from one town to the next. That could suggest a lack of stability and lead to your loan application being denied.