There has never been and never will be a ‘one size fits all’ financial product that is suitable for everyone. Bridging finance is no different!
Ensuring you understand the pros and cons of bridging loans is essential, if considering short-term funding for any purpose. Consulting with an independent broker will help you find the perfect lender to suit your requirements and access preferential bridging loan rates that are not available on the High Street.
The Advantages of Bridging Loans
Competitive bridging finance has the potential to be advantageous in a variety of ways, including but not limited to the following:
- Bridging loans can be quicker and easier to arrange than traditional loans, often funds being received within a matter of days.
- Monthly interest can be rolled up and added to the total balance of the loan, meaning no monthly repayments need to be made.
- Interest rates on bridging finance can be lower than 0.5% per month, adding up to exceptional value for money with prompt repayment.
- Applicants with poor credit or a history of bankruptcy may be eligible for bridging finance, if able to provide adequate security for the loan.
- Bridging finance is an ideal funding option for urgent and time-critical purchases, such as buying properties at auction.
- Many specialist lenders are willing to secure bridging finance against uninhabitable or non-standard properties.
In addition, potential bridging loan uses are limitless in terms of scope and flexibility. Comparatively few lenders place any restrictions whatsoever on the applications for their loans, which means that the funds can be used for almost any legal purpose.
The Disadvantages of Bridging Loans
Prior to applying for bridging finance, it is important to objectively consider the potential disadvantages of a bridging loan, such as the following:
- Bridging finance can become extremely expensive if the total balance of the loan is not repaid on time as agreed.
- Bridging loans are available exclusively to applicants with the appropriate security (assets) to cover the costs of the loan.
- As with any secured loan, the lender has the right to take possession of your assets if you fail to repay your loan or breach your contractual agreement.
- Bridging finance is strictly short-term and must be repaid within a matter of months however longer repayment periods are typically unavailable.
Due to the potential risks associated with bridging finance in general, it is essential to ensure that you have a valid ‘exit strategy’ in place before applying. Providing evidence of a viable exit strategy will also help you access the most competitive bridging loan rates and reduced overall borrowing costs.
Ask the Experts…
At UK Property Finance, we can provide the independent support and representation you need to access a competitive bridging loan for any purpose.
For more information or to discuss the potential benefits of bridging loans in more detail, contact a member of the team at UK Property Finance today.