Top tips for choosing a bridging loan

Wednesday, 22 June 2011 11:53

Bridging loans

Bridging loans

If you need to access money quickly, you may want to consider the benefits that are on hand with taking out a bridging loan.

Such a short-term finance deal can provide you with the resources you require to purchase a home and advance up the property ladder, but what is the best way to go about obtaining one?

When it comes to selecting a bridging loan, it is important to bear in mind the reasons for why you want one. Doing so can help to ensure you find the product that is perfect for your needs.

Through obtaining bridging finance you can get the funds you need to buy your dream property, something which can be particularly handy if problems selling your existing home have meant the money you were hoping to raise to fund your new purchase has not come to fruition.

Similarly, bridging credit can be used for buying commercial properties as well as residential developments that you intend to rent to others.

But while bridging loans are primarily used as a means of purchasing property, you will find that this is by no means their only purpose.

Indeed, this kind of credit has been deployed by some people to consolidate multiple debts into a single monthly repayment, so applying for bridging finance could prove effective if you are struggling to keep on top of personal loans, store cards and other financial commitments.

Others, meanwhile, have used bridging loans in order to buy-out a business partner.

Whatever you want them for, bridging loans are a significant financial commitment and as they are typically worth several thousand pounds it is important that you take the time to make sure you are getting the most competitive deal possible.

Although you may be tempted to snap up the first offer you come across, by comparing rates from a range of different providers you can be confident of obtaining an attractively-priced loan.

The amount of interest applied to your loan is likely to be at the forefront of your mind, but as this may not be the only charge you have to deal with it should not be your sole consideration.

Some providers will implement administration fees when you take out a loan with them, although there are others who do not impose such upfront costs. You should also consider the length of time over which you intend to pay back your loan and think about whether you will be charged should you complete your repayments ahead of schedule.

When browsing the options available to you, it is important that you go for a reputable company. As such, borrowing from a firm regulated by organisations such as the Office of Fair Trading could be advisable.

For more information all about bridging loans and help on selecting the product that is most suitable for you, speak to an expert advisor.

Such a professional should be able to give you guidance on the various options that are available and point you in the direction of the products that are most suitable for your individual needs.

You should find that you are able to receive such advice online, although ringing bridging loan telephone numbers could also help to access the information you require.

By bearing in mind the above points you can be confident that you will be able to obtain a competitively-priced bridging loan suitable for your needs.



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Finance articles

  • Is a bridging loan right for budding entrepreneurs?

    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.

  • Important questions to ask bridging loan companies

    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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