Finance Relocation 2019: Which Loans are Worthwhile for a Move?

 

Moving within a manageable radius is not a problem for most people. Family and friends help, and in a few days the new apartment is ready for occupancy. However, if a major move is imminent, perhaps for work reasons or because a matter of the heart is involved, a complete move can quickly become expensive. Much has to be delegated, and so larger amounts come together, often more than originally planned. In order for the move to be completed on schedule, the right financing is important. Credit for the move can be taken in different ways. We show you the possibilities how to finance the move.

  • All relocation costs financed with relocation credit
  • To be able to move as planned
  • Schedule additional costs in advance
  • Vote credit and budget

1. The move and everything that goes with it…

1. The move and everything that goes with it ...

What does it actually mean? When it comes to a major move, some expenses come together. First of all, a suitable apartment must be found in the new living environment. For those who move, this brings along travel costs, possibly also accommodation costs. It is, of course, ideal to have some objects “checked out” before arrival and to have the most important information about rental rates and advantages and disadvantages of the respective districts. This provides an overview and helps to talk with brokers and landlords. If an apartment is found, often fall to brokerage costs, in many cases, a deposit, which is deposited as security.

Of course, some attractive apartments are turnkey, but with cheaper properties you can expect a renovation. Those who find such a “bargain” should obtain an independent appraisal of the cost of the renovation before signing the contract in order to avoid later surprises. If then the wallpaper on the walls and the laminate laid, must still be organized the transport of their own belongings. For the costs of a moving company including packaging material and packers are usually still spending on new or additional pieces of furniture that complete the household. Also, an amount for the “little things” such as Internet, antenna and the like should be calculated.

  • Brokerage fees and security deposit
  • renovation costs
  • Moving company
  • New furniture and decorations

1.1 credit for the kitchen? Best separately!

Above all, when the move to your own home is imminent, the proud owners are also planning a new and modern kitchen. Often, kitchen equipment is not financially viable because mortgage lenders see the kitchen as moving inventory that is not part of the property security. But if you use dealer financing, you often have to realize with so-called 0% financing that the supposedly cheap purchase turns out to be expensive and burdensome for the budget over the long term. The purchase of a kitchen in the context of the move can be financed separately from the removal costs either through an installment loan or a residential loan. Both options allow the tenant or builders more flexibility in the design of installments and the term.

Moving funding with these possibilities

  • installment loan
  • line of credit
  • Variable credit
  • Company loans

2. Financing the move with a installment loan

2. Financing the move with a installment loan

Optimal for financing the move is in most cases an installment loan. Many retail banks and direct banks provide consumer loans, the amounts of which can range between 500 and 100,000 euros. The duration and the amount of the monthly installments are flexibly adjustable. In many cases, the amount of installments can be reduced or the term can be shortened by making a down payment. Installment loans are available with terms of 12 to 96 months, depending on the provider. Special payments should be possible to pay off the loan faster, ideally, the early repayment should be free of charge. Since interest rates on installment loans are quite different, users should always consult a loan comparison online. Particularly important is the APR, because it defines the “price” of the loan, ie the costs incurred in addition to the amount taken up.

2.1 Installment loans with final installment

In addition to the classic installment loans, financing with a higher final installment is also offered. In the so-called balloon loans fall through this construction, the monthly rates then cheaper. The term is limited to a maximum of 60 months. Such a balloon loan can be very useful, for example, if the borrower already knows that he will have a larger amount of money available in the foreseeable future. For example, when moving, the final installment of the balloon loan may be serviced if the old apartment is sold or, more likely, the deposit is returned.

2.2 Benefits of relocation financing with installment credit

Especially when it comes to a move for professional reasons, over longer distances, or the establishment of a first common home, there are many wishes and preferences. If you change your place of residence for work, you have to settle in quickly. This means that even the new home must be quickly finished and comfortable, so that the career jump does not become a stalemate. Even with young couples connect to the new home claims. With a installment loan, your own wishes and practical needs for the start in the new apartment can often be financed with very good returns. With the classic installment loan, the customer can also make the amount of the installments and the term very flexible.

2.3 Disadvantages of relocation financing on installments

Of course, an installment loan has its price, of course. The bank calculates the APR to earn the financing solution. The fact that you pay more for a installment loan than the sum taken is obvious. In order to keep the costs as low as possible, it is advisable to keep the loan itself as well as the running time as low as possible. Another disadvantage, especially with high loan amounts with a long maturity is the fact that the budget is additionally burdened for a while. Therefore, it should be considered before the loan application, whether and how the payment of installments is secured.

3. Finance the move with a credit line

3. Finance the move with a credit line

Those who do not calculate their removal costs in advance and then come into financial default, can easily be tempted to overdraw the credit line of the current account. In principle, it is possible to move by dispo, but rarely a good idea.

3.1 Advantage of the MRP loan

A credit line can be claimed immediately without application or processing fee. If it really is manageable amounts that are needed only very short term, this solution may be cheaper than a installment loan. In addition, the MRP framework has already been approved, so a credit check is not required.

3.2 Disadvantage of the credit line

The terms and costs of using the credit line are less manageable for many customers. Although the credit line is flexible, even the “overdrawn” amounts usually do not have to be closed very quickly, but the discretionary interest is considerable, sometimes even double digits, and accumulate every month. In any case, they are higher than the effective annual interest rates on many attractive installment loans, so you should also calculate his move financially really wise and not give in to the temptation to overdraw the account at random. With a drastically overdone checking account, it may take months for the account to be balanced. The restrictions during this time can burden the household considerably.

4. Variable loan for the move

4. Variable loan for the move

The variable loan is a less common financing solution, but is excellently suited as a loan for the move. The credit, also known as the “call-off loan”, is a credit limit of between € 10,000 and € 25,000 granted by the Bank. The special thing here is that this loan can be used again at any time, once approved. The customer does not have to use this sum – but he can. Especially if the costs are not fully calculable, but you definitely want a credit line, variable credit is the solution. The variable loan is repaid via fixed monthly minimum payments, and special payments are also possible. Unlike the installment loan, however, the interest rate here is variable and is calculated daily according to the current interest rate.

5. Finance relocation with employer loans

5. Finance relocation with employer loans

You do not always have to go to the bank to get a loan for the move. In the case of work-related moves, it can happen that the employer helps with a loan. The so-called employer loan is even interest-free for large companies, or often has only a low interest rate. The repayment is charged here with the salary payments and individually discussed. An employer loan is a solution that offers itself, if you have no reservations regarding the new job, so that you can tie up financially for a while.

6. Loan for the move: Keep the term as short as possible

6. Loan for the move: Keep the term as short as possible

When it comes to financing the move, you should resort to loans that are not too long in maturity. The burden over a long time is not desirable, as long as you change your career, for example. In this case, a new move may be in the house, while the previous loan is still not cleared. Against the background of a rapidly changing world of work, a little caution is needed here.

7. Loan for relocation: use provider comparison

7. Loan for relocation: use provider comparison

In order to be able to calculate the credit well, it is advisable to compare the financing options of the individual banks. Who knows what sum is needed, can enter the sum and the desired duration in a credit comparison portal and then receives a list of the most attractive offers. Especially with installment loans, the differences in the APR are sometimes quite high. Also, the price differences between branch banks and direct banks fall in the credit in weight. Although the branch bank allows to use a personal consultation. Virtually all financial products are less favorable than a direct bank, which passes on its lower operating costs to its customers. A loan calculator provides clarity as to which provider actually has the best conditions for financing the planned move. In addition to the loan amount and the interest rate, it should be ensured that special repayments and premature repayments are possible free of charge.

8. Requirements for the removal loan

8. Requirements for the removal loan

Apart from the credit line or the financing by the employer, other loan models require a request and a grant from the bank. The borrower must meet certain requirements in order to succeed with his application. The easiest option is to apply for a direct bank loan. The application for installment loans, for example, is possible online and completed in just a few steps. The borrower must be of legal age and have a residence in Germany. A certain credit rating, ie a fixed monthly income, is usually a prerequisite for the approval of the loan. As a rule, the bank checks the creditworthiness without obligation and provisionally during the application process and later makes an official inquiry to the Private credit. It is not easy to apply for a loan for people who have no fixed income, such as housewives, students, apprentices or trainees Freelancer. Banks often offer their own loan solutions for students who can not yet provide their own income, while freelancers may sometimes request additional documents.

The loan application must first be completed in full and correctly. Mostly it is printed out, has to be signed and uploaded or sent by post to the bank. Also part of the application is the legitimacy via the PostIdent or VideoIdent procedure. For this purpose, the borrower must have a valid identification document ready, even a proof of residence, for example, by a current utility bill is required by most banks. If additional documentation is required, the applicant will be notified. For freelancers usually a tax assessment from the previous year is desired. Subsequently, the bank checks the application, the approval depends inter alia on the results of the Private credit query. If there is no negative Private creditscore, a loan for the move is usually granted swiftly and paid out within a few working days.

9. Conclusion Finance relocation – with the right credit well feasible

9. Conclusion Finance relocation - with the right credit well feasible

A move brings a changeover, relatively much work and also costs. In order for everything to go according to plan and the new apartment is quickly made comfortable, especially the finances must be right. Therefore, relocation workers should calculate all factors of financing and then decide which loan is necessary for the move. So realtors, moving company, renovation and furniture for the new home can actually be paid.

Choosing the right loan provider is essential to ensure a smooth process. In no case should the checking account be unplanned for a move. Usually a installment loan is a cheaper solution and comes with lower interest rates. Alternatively, the use of a variable credit line is conceivable, if one has the finances under control, but wants to be prepared for unforeseen expenses. Anyone who is lucky receives a loan from the employer, which serves as a cash injection when moving. In any case, a loan comparison and the use of a loan calculator is a good idea, so that the move into the new home does not come to a cost trap.

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