Relocation Loans in the UK | Cover Deposits and New Homes
Have you got a job in another city, or have you decided to move home? Moving can be daunting. From transportation costs to deposits and from purchasing furniture to covering setup costs, financial pressure quickly escalates. Well, if you do not have sufficient money to pay for relocation costs, you can consider relocation loans in the UK.
Table of Contents
- What are relocation loans in the UK?
- Here are the features of relocation loans
- Who qualifies for relocation loans in the UK?
- Are relocation loans available for bad credit?
- How does the relocation loan process work?
- What are alternatives to relocation loans?
- A case study: relocation loans
- Checklists for responsible borrowing for moving expenses
- The bottom line
What are relocation loans in the UK?
Relocation loans, also known as loans for moving house, are small unsecured loans that have been designed to help fund moving expenses. You can use personal loans for moving for the following purposes:
- To cover the transportation costs
- To pay for rent deposits
- To purchase new furniture
- To pay for packaging and other associated services
Personal loans for moving house are ideal for all types of moving-related expenses, whether you are downsizing your house, relocating for work, or moving into a rented accommodation.
Here are the features of relocation loans:
- You can borrow as minimum as £500.
- The maximum borrowing limit for these loans is £7,500.
- The loan is approved the same day, and hence they are also called same-day loans.
- If the loan amount is less than £1,000, you will be allowed to discharge the debt in one fell swoop, but larger sums are paid down in fixed monthly instalments.
- Repayment periods for larger loans vary between 12 months and five years.
- These loans are not backed by collateral.
- Instant cash transfer
Who qualifies for relocation loans in the UK?
Here are the conditions you need to meet to be eligible for same-day moving loans:
- You must be of a legal age to apply for a loan, which is 18.
- Apart from that, you must have a steady income source to be able to repay the debt.
- You cannot apply for any loan if you are a non-resident of the UK.
Are relocation loans available for bad credit?
Your subprime credit history cannot preclude you from submitting your application. Lenders give a fair opportunity to everyone regardless of their credit history. Your overall financial condition is checked rather than just your credit score. Sometimes, you are refused despite a good credit rating as you fail to prove your repayment capacity.
Bad credit relocation loans are quite expensive as they charge high interest rates. Since these loans are not secured against any property or other valuable asset, lenders cannot recover their money in case of default. Lenders charge high interest rates for subprime borrowers to mitigate the risks involved in lending money to them.
If you are not satisfied with the offered loan terms, consider applying for joint loans for relocation. These loans involve a co-applicant who could be your spouse or parents. However, they must have a good credit rating and strong repayment capacity. Both you and the co-applicant will be responsible for discharging the debt partly or completely.
How does the relocation loan process work?
To apply for a loan for moving expenses, you should follow the steps mentioned below:
- Fill in the application form by providing your personal and financial details.
- A lender will quickly go through your application to give a pre-approval decision.
- You will have to provide documents such as an address proof, a bank statement, etc.
- A lender will make the final decision after a perusal of your credit check and income sources.
- Once the decision is made, the money will be sent to your bank account.
This whole process does not take more than a day.
What are alternatives to relocation loans?
It is not easy to qualify for a personal loan for movers. Your overall financial condition will be taken into account, and if your affordability is called into question, you will be refused. You do not need to be despondent, as you can consider the following alternatives:
| Alternatives | How they work |
|---|---|
| Budgeting loans | You can use them to buy furniture, pay rent in advance, and pay for moving costs. You must have been getting benefits like income support for the past six months to be entitled to them. The size of the loan amount varies between £100 and £812. |
| Employer relocation assistance | This assistance benefits those who have to relocate for work. A one-time cash payment is made, which might be taxable. Moving-related expenses are reimbursed by the employer based on receipts you submit. |
| A personal line of credit | You borrow money against the set limit. Still, it has a fixed lifespan, which include the draw period and the repayment period. You can make the payment of any size as and when you want. Interest will be accrued only on the withdrawn amount. As soon as you enter the repayment period, the balance will be paid off in full, along with interest. Interest rates for a personal line of credit can be fixed or variable. |
| Home equity line of credit | This allows you to borrow money against the equity you have built in your house. You pay interest only on the amount you withdraw. Your house is secured, so there is a risk of losing it. |
A case study: relocation loans
John and his family had to relocate from Romford to Westminster. The moving cost was quite high despite selling a furnished accommodation. Since they managed to acquire a less expensive property in Westminster, they saved some money at the time of refinancing their mortgage, but that was insufficient to purchase new furniture. On top of that, moving expenses were ready to burn a hole in their pocket.
Then, he applied for a relocation loan from LoanChester, which he found at lower interest rates in relation to other direct lenders. Unfortunately, his credit score was not impressive, so the loan amount was restricted. He needed £2,000, but he was offered only £1,300. He applied for a moving loan with his wife, whose credit rating was stellar, and then he successfully managed to get what he needed at affordable interest rates.
Checklists for responsible borrowing for moving expenses
Here is the checklist for you so you do not end up with an expensive borrowing:
- Compare deals between lenders. Make sure that you consider processing fees and associated charges. Comparison is a must to obtain cheap relocation loans in the UK.
- Assess your affordability, as it helps you figure out if payments are manageable. You must not struggle to pay for other essential expenses while paying for moving loans.
- Before grabbing loans, you should check alternatives such as savings, any financial assistance from your friends and parents, and employer relocation packages.
- Keep your credit score in good condition. This ameliorates your chances of being approved for affordable loan deals.
The bottom line
Relocation loans do not have to be expensive if you carefully assess your overall financial condition. Borrow money from a reputable direct lender so you do not struggle with payments because of expensive deals.
If you are looking to borrow money to pay for moving expenses, apply for a relocation loan from LoanChester. You will get money at the most competitive interest rates despite a less-than-perfect credit history.
John Milton is an experienced financial writer and personal loan expert with years of experience identifying the right category for people. He has been Chief Financial Expert at LoanChester in the UK and provides insights on the big deals of the lending institution. He is known for transforming the loan policies as per the unique needs of different borrowers. First, he focuses on what the borrowers require according to their favourable and adverse financial stances, and then he focuses on making a variety of personal loans affordable. John writes well-researched content on personal loans and also guides borrowers regarding their unique financial conditions. John holds a Ph.D. degree in banking and finance.
