Bridging loans can be an excellent way of securing additional funding, with borrowers able to access cash both swiftly and efficiently using such an arrangement.
This can be especially useful for people operating in the property market, particularly developers who are hoping to purchase land for residential or commercial purposes.
If you are interesting in pursuing such an arrangement, you can secure up to £250,000, which can be paid back over a period of up to 12 months, although typical agreements last for between one and six months due to the high interest rates.
Whether you are an individual, small or large-sized company, you will be able to use this cash to snap up any discounted land parcels that you are hoping to build upon.
This means bridging loans are suitable for all kinds of projects, from a high-end urban initiative to a self-build structure, enabling you to move quickly should you come across a piece of land that is perfect for your needs.
Whatever your requirements, it is important to speak to a bridging loans expert in order to receive advice on your application.
This way, you can rest assured you are making the right decisions and you can assess bridging loan rates to ascertain whether it is the correct option for you.
Specialist advisers can help you to put together a repayment structure that will give you time to purchase the land, build on it and then begin renting it out.
Securing a bridging loan also allows you to funnel your existing funds into the construction work, rather than worrying about how you will be able to afford the plot on which it is based.
Once you have completed the development, you can then take out a regular mortgage in order to pay off the bridging loan, with many providers offering an additional service to help you find the best deals for your circumstances.
Thinking about committing to this form of borrowing? Make sure you use a bridging loan calculator to see what your repayments may be each month.
Simply input the amount you require from the lender, as well as the interest rate, and you will be given an estimate on how much you will be charged.
This enables you to experiment with different figures in order to correctly judge what amount you will be able to afford during the course of the loan.
Interest rates can begin at 1.5 per cent and there may be a range of flexible repayment plans, so you might be able to clear the debt earlier than originally arranged or receive deferrals and payment holidays if you are struggling.
Depending on your agreement, you may need to meet certain specifications regarding planning permission, so make sure to check the small print in the terms and conditions.
However, land purchases are not the only area of the market in which bridging loans can prove useful.
Many people use this line of credit when buying properties at auctions, enabling them to snap up discounted lots for a price that may be outside of their immediate finances.
Therefore, individuals can take out a bridging loan to cover the cost of the house, before selling it on and using the revenue to cover the loan and interest.
They are also commonly used to bridge the gap in money when purchasing a new home, particularly if the old one is yet to be sold.
Raising the money you need to start a business can be hard, however, there are alternatives to bank loans. Among them are bridging loans, peer-to-peer lending and borrowing money from friends and family, meaning you need to do plenty of research.
Before taking out a bridging loan, you must understand a number of key points. These include the rate of interest you will be charged, the length of time you have to repay the loan and whether there are any arrangement fees that apply.
You should only consider bridging finance if your funding needs are temporary. This is because the high rates of interest make bridging finance unsuitable as a long-term solution, so if you have long-term needs, you should look at other options.
Both banks and specialist bridging loan companies can provide the bridging finance you need, meaning you need to compare products from a range of providers. You need to look at factors such as interest rates and arrangement fees.
Some bridging loan companies will lend up to £5 million if you have sufficient equity in your home, however, what if your borrowing needs are more modest? If you need a sum of £10,000, bridging loans can still be an option.
A price war on personal loans between £7,500 and £14,999 means that loans are now at their cheapest for ten years. We present the top eight personal loans.
The Bank of England says that because of the time lag in loans becoming effective the Funding for Lending Scheme won't have a major impact until 2013.
The Clydesdale and Yorkshire Bank has cut the rate on personal loans between £7,500 and £15,000 to 5.1 per cent beating the Tesco Bank deal to go to the top of the best-buys.
Sainsbury's Bank has cut the rate n personal loans for Nectar card holders to just 5.4 per cent for people who borrow over a one to three-year term.
Marks & Spencer has launched a new personal loan for applicants who want to borrow between £7,500 and £15,000 over a 1-5 year period at just 5.5 per cent.
If you're looking for an effective way of raising finance, you'll find there are a number of ways that you can do this. And while personal loans can be one possible option, when you think about the advantages that are on hand with an equity release plan it may be the latter product you are most inclined to want to take out.
The Derbyshire Building Society has cut the rate on its personal loan between £7,500 and £14,999 to 5.4 per cent matching the deal from Sainsbury's Bank.
M&S Bank has announced that it is cutting the rates on personal loans between £7,500 to £15,000 to just 5.8 per cent.
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