Relocation Loans Explained: A Guide to Bridging Finance in Australia

Overview

• What Is A Relocation Loan?
• How Do Relocation Loans Work?
• Benefits Of Relocation Loans
• Things To Consider Before Getting A Relocation Loan
• Eligibility And Application Process For A Relocation Loan

A relocation loan provides the funds needed to cover the costs of a move, from packing and removalists for local or interstate moves to a bond at the new property and the cost of transferring utilities. 

Moving house is expensive, but it’s possible with a plan. Whether you are moving for a new job or career opportunity, to be closer to family or friends or just for a fresh start, a relocation loan can help cover any costs that fall outside your household budget, until the bond on your current property is refunded.

When you apply for a relocation loan, you can borrow up to $5,000 to help with the cost of moving, covering bills like the rental bond, end-of-lease cleaning, staging to sell your home, removalists and more. 

A personal relocation loan can be secured against a car that you own, and you’re able to make extra repayments, so, for example, when your bond is refunded you can put it towards paying down the loan. 

Repayment Process 

Rather than coming up with the full amount of cash you need to move, a personal moving house loan means you can repay the total amount in smaller repayments that align with when you get paid. Repayments can be monthly, weekly or fortnightly depending on what suits best. 

This makes moving much easier, knowing that all the costs can be paid upfront.

Relocation loans offer several advantages for anyone looking to move:

• Flexibility: You can secure your new lease before getting your bond back.

Avoid Temporary Housing: No need to move into short term accommodation waiting for a bond refund and the end of your lease.

While relocation loans can be incredibly useful, they’re not without their considerations:

• Is there another way you can fund the move? Relocation loans often come with higher interest rates, there may also be an application fee that applies. If there’s another way you can finance the move, it might be worth considering if you can down-size and sell unwanted items, or use money from savings.  
• More than one cash loan:  Committing to more than one loan at a time means less discretionary spending, so make sure to budget for the extra repayments.  

Double Rent: If your leases overlap you’ll be responsible for rent for both properties, which can be challenging to manage.

A relocation loan can be an excellent solution for anyone looking to upgrade, downsize, or relocate and manage the many upfront costs of moving house.  However, it’s essential to carefully consider your financial situation before committing to this type of loan.

By understanding how relocation loans work and weighing the pros and cons, you’ll be better equipped to make an informed decision about your living location. Whether you’re upsizing to accommodate a growing family or moving for a career opportunity, a relocation loan might just be the bridge you need to cross into your new home sweet home.

If you need some cash to help cover the costs of moving into your new house, take a look at our quick cash loans. You can apply online and have an outcome within two hours – perfect for that unexpected truck rental fee!

How does a relocation/bridging loan work?

A relocation loan provides short-term financing to help people move house. A moving house loan can help with costs of moving, a bond at the new property or the costs involved in preparing to leave your existing home. 

Is a relocation/bridging loan worth it?

A relocation loan can be worth it if you need to secure a new home before moving out of your current one, offering flexibility and avoiding temporary accommodation. However, potential drawbacks include higher interest rates and the risk of financial strain if your financial obligations at each property overlap. Ultimately, its value depends on your specific circumstances, so consulting a financial advisor is recommended.

What is the minimum amount for a relocation/bridging loan?

The minimum amount for a relocation loan varies from lender to lender. A typical amount is usually around $2000 to $5000 to cover moving costs and a property bond. However, it’s advisable to check with specific lenders or consult a mortgage broker to find the most suitable option for your particular situation, as loan terms and conditions can differ between financial institutions.

The information provided in this blog is of a general nature and is provided without considering your specific objectives, financial situation, or needs. It is intended for informational purposes only and should not be relied upon as financial, investment, or other professional advice.

Before making any financial decisions or taking action based on the information presented, you are strongly encouraged to assess its appropriateness in light of your individual circumstances. Red Tree Finance does not intend to provide personalised financial advice, and you should seek independent financial, legal, tax, and other relevant advice tailored to your unique situation.