Loans For Moving: A Complete Guide

Moving to a new home is an exciting milestone, but it can come with unexpected expenses. From packing supplies and truck rentals to hiring professional movers, costs can add up faster than you might expect. If you’re short on cash, you might consider using a loan to cover your moving fees. 

Here, we explore the types of loans available, how to apply for a moving loan, and the benefits and challenges of using a loan to pay for moving costs.

Key Points:

• Moving loans cover a wide range of expenses, from packing supplies and truck rentals to professional movers, temporary storage, and setup costs.
• Types of loans for moving vary, including personal loans, lines of credit, credit cards, and cash advances, each with different costs, interest rates, and flexibility.
• Borrowing comes with pros and cons: loans help spread out upfront costs but add debt and interest payments, so careful planning is needed.
• More affordable alternatives may be available, such as decluttering, DIY moves, early booking, discounts, employer assistance, or selling items to fund the move.

Can You Get A Loan To Pay For Moving Fees In Canada? 

Yes. If you need help paying for your moving fees in Canada, you can apply for a moving loan from banks, credit unions, and private lenders. Moving loans are flexible and can help you cover the upfront costs associated with moving.

What Expenses Can Relocation Loans Cover?

One of the benefits of a relocation loan is its flexibility; you can use it for almost anything. Here are examples of some of the moving costs you can cover with a loan:  

• Boxes and other packing supply
• Moving truck rental
• Professional movers 
• New furniture or appliances
• Setting up utilities
• Temporary storage unit
• Temporary accommodations 

How Much Does it Cost to Move?

The cost of moving can vary significantly based on factors such as your location and how far you’re relocating. A local move (within 100km) will typically cost less than a long-distance move (over 100km). 

Other factors that can affect moving costs include: 

• The size of your house (more rooms usually equal more boxes)
• Whether you need temporary storage
• If you want to pack yourself or hire packers
• If there’s good access (elevator) or difficult access (stairs, long walk) to your living space
• When you move (summer is high season)
• If you’re moving specialty items (like high-value art or a piano)

Learn more: How Much Money Do You Need to Move Out In Canada?

Loan Types To Cover Moving Fees 

Here are some of the types of loans you can consider to cover your moving costs. 

Personal Loans

A personal loan is a lump sum of money that you pay back over time in installments. Most personal loans range from $100 to $50,000, with terms of six to 60 months. You can use a personal loan to cover all of your moving fees, up to your loan limit.

You might choose a personal loan if you think your moving costs will be high, and you have a solid credit score that can help you secure a loan with a good rate.

Learn more: Best Personal Loans In Canada

Lines Of Credit

With a line of credit, you can borrow up to a pre-set limit and use the money to cover any type of moving cost. You can use as little or as much of the money, up to your limit. You only pay interest on the money you use, and you can pay it back when you want. 

A line of credit might be the right choice if you’re not sure how much money you need to cover your moving costs, and you want a flexible option. 

Credit Cards

Similar to a line of credit, a credit card allows you to borrow up to a maximum limit, and you only pay interest on the portion you use. Once you make your minimum payment, you can pay your balance on your own schedule, but you‘ll pay interest until your balance is paid back in full.

Your credit card might be the best option if you need fast access to money, your moving costs are pretty low, and you know you can pay off your balance quickly. 

Cash Advance

You can use your credit card to take out a cash advance at an ATM or your bank. Unlike a regular credit card transaction, which gives you an interest-free grace period of at least 21 days, there’s no grace period on a cash advance. You start paying interest immediately, and rates are higher than for a regular purchase.

You might choose a cash advance if you need immediate access to money to cover a last-minute moving expense. 

How To Apply For A Loan For Moving 

If you’re ready to apply for a moving loan, follow these simple steps: 

Step 1: Check Eligibility

Visit different lenders’ websites to check eligibility criteria, which may include a minimum credit score, income level, or debt-to-income ratio. Banks tend to have stricter requirements, while private lenders are typically more lax when it comes to loan criteria. 

Step 2: Compare Lenders

You can review individual lenders’ sites or use a loan comparison site like Loans Canada to make the process quick and easy. Evaluate loans on interest rates, fees, repayment terms, and loan size.

Step 3: Apply

When you’ve picked a loan, complete an application online or in person. Make sure you have your financial documents, as well as government ID and proof of address, ready to go.

Pros And Cons Of Moving Loans 

Before you decide if a moving loan is right for you, consider the benefits and challenges.

Pros:

• Lower upfront cost: By using a loan, you can reduce the amount of money you need immediately for upfront moving costs and spread it out over time. This can make it easier to budget for all of your expenses.   
• Flexibility in use: Whether you need to pay to hire movers, buy new furniture, or store your belongings, moving loans don’t restrict how you spend the money. 
• Preserves savings: Using a moving loan means you don’t have to dip into your savings accounts to cover moving-related costs.

Cons:

• Added debt: While it might be nice to have extra money upfront, don’t forget about debt repayment. Depending on how much you borrow, you could be making debt payments for months or years, making it more challenging to afford other bills, like your mortgage, utilities, or groceries. 
• Interest costs: Borrowing money costs money. Some options, like your credit card or a cash advance, come with higher interest rates that can make it challenging to repay your debt. 

Tips To Keep Moving Costs Low 

Here are a few actions you can take to avoid taking on debt and reduce your moving expenses. 

Declutter Your Space

Aim to sell, donate, or recycle items that you no longer need. This can help reduce the number of boxes you need, the size of your moving truck, and can result in lower labour costs. Plus, if you can sell some of your stuff, you can put this money towards moving expenses. 

Look For Cheap Packing Supplies

Ask your local grocery or liquor stores if they have free boxes. You can also look at online marketplaces to see if people are donating boxes or selling them at a reduced rate. 

Do It Yourself Where Possible

The more disassembling, packing, and moving you can do on your own, the more you can save on labour costs.  

Book Movers Early

Rates are often cheaper when you book in advance instead of waiting until the last minute. Also, consider moving mid-week or mid-month instead of on the weekend or at the end of the month.

Compare Quotes

Don’t accept the first quote you get from a moving company. Take the time to get multiple estimates to find the best deal. Some companies might even agree to match a competitor’s price. 

Ask About Discounts

Some moving companies may offer discounts for students, seniors, veterans, returning customers, or if you book online or pay in cash. 

Avoid Hidden Fees

Before you hire a moving company or put your stuff in storage, ask the company to outline all of the potential fees. This can help you avoid surprise fees when you go to pay your balance. 

Claim Employer Or Tax Benefits

If you’re relocating for work, ask your employer if they’ll reimburse some of your moving expenses. In some cases, the costs of relocating for work, business, or school may be tax-deductible.

Alternatives To Loans For Moving

If a moving loan doesn’t feel like the right fit for you, there are a few alternatives you can explore: 

• Employer-sponsored relocation assistance: As mentioned, if you’re relocating for a job, your employer might offer some financial assistance to cover your costs. 
• Sell your items: If you’re planning a long-distance move, to another province or another country, you can consider selling your stuff. This can help reduce your moving costs, and you can use the money you earn to buy new things for your new home. 

Additional Reading

Loans For Newcomers In Canada: Build Credit & Access Affordable Financing

Best Personal Loan Interest Rates In Canada

Emergency Loan For Rent

Final Thoughts

Moving isn’t cheap, and there are a lot of costs you might not anticipate. If you don’t have enough cash on hand to cover all of the moving-related costs, you can consider applying for a moving loan. Aim to only borrow what you realistically need, and have a plan in place to repay the debt as soon as you can. 

FAQs

References: 

¹Canada Moving. How Much Do Movers Cost? Canada Moving.