Criteria you should look for in bridging loan companies

Thursday, 01 December 2011 05:12

Seek advice before getting a bridging loan

Seek advice before getting a bridging loan

If you are hoping to obtain bridging finance your thoughts could well be preoccupied with what you intend to do with the money. However, instead of rushing out and applying for credit with the first lender you come across, it is important to seek out bridging loan companies with care.

As such credit deals are a significant financial commitment – the fact your loan is secured against a property means they are usually worth several thousand pounds – taking one out is not something that should be done lightly. In the same way as when applying for other monetary products, it is a good idea to compare a range of financial services providers in order to establish which will offer you the best deals.

You should take into account a range of criteria during your search for a bridging finance provider and one thing that is certainly worth checking is to see which – if any – government agencies and regulatory bodies they are accredited by.

A reputable organisation ought to be overseen by the likes of the Office of Fair Trading and the Financial Services Authority. In doing business with companies that are properly regulated you can be sure that you are borrowing from a lender that you can trust.

In your efforts to figure out which bridging loan company you should borrow from, you may also want to look into the experiences of previous customers. Asking friends and family can be one way of doing this; however, you should also see if a firm has a testimonials page on its website.

Here borrowers can give feedback on the organisation they have taken out a loan with and highlight how they have used the money, so – depending on whether it is overwhelmingly positive or negative – it could inform your decision about which lender to borrow from.

In your search for a bridging loan provider it is also worth considering how much money a company will allow you to borrow. Some organisations offer loans of up to £100,000, so you check first that the company you want to borrow from can provide you with the funds you need.

Eventually, of course, you will have to repay your loan and one vital criteria that ought to be taken into account in your search for a bridging loan provider is the interest they implement. This will have a significant impact on how much money you need to pay back each month and you are likely to find that the rate of interest you are charged depends on the total sum of money that you wish to borrow, as well as your credit history.

However, the interest attached to your loan is not the only charge that you will be subject to – you may also have to pay administration and legal fees. In addition, you could have to pay for a valuation report to be carried out on the property through which you want to secure a loan. Depending on the firm you borrow from, some of these costs could be incorporated into your monthly repayments, while others might be implemented upfront.

By taking your time to search thoroughly for a financial services provider and seeking advice on bridging loans you can be confident the organisation you borrow from is a reputable one that will offer you competitively-priced finance.



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    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.

  • Why bridging loans are only suitable for short-term funding

    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.

  • Banks vs. specialist lenders – which bridging loans are best?

    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.

  • Can bridging loans work for those who only need small amounts?

    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.

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