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Bridging loans: Not just for business borrowers 

4 min read

22 November 2019

Here's why everyday borrowers across Britain are turning to bridging finance.

It’s common to assume that bridging finance is aimed primarily (or even exclusively) at the business community. Recent years have seen bridging finance become an increasingly popular go-to for commercial borrowers across Britain.  But this doesn’t mean that these specialist secured loans can’t also be useful for residential borrowers.

If you’re unfamiliar with the concept, bridging loans are short-term secured loans for relatively major purchases and investments. They are secured against the property (commercial or residential) of the borrower and designed to be repaid within 1 to 18 months. This enables borrowing costs to be kept to absolute minimums.

Perhaps the most defining characteristic of the bridging loan is the way in which the underwriting process can be completed within five working days. This makes bridging loans ideal where time is a factor and traditional mortgage/remortgage deals are out of the question.

In which case, where and when would bridging finance be a viable option for the everyday household? When would a bridging loan represent a better option than the more conventional secured loans on the market?

Non-business bridging loan uses

A bridging loan can be used for any legal purpose whatsoever. The most common uses of bridging finance in non-business circles are as follows:

  • Purchasing a property as quickly as possible to clinch an unbeatable deal.
  • Picking up a property at auction and paying for it within four weeks.
  • Buying property considered uninhabitable or in need of major restoration.
  • Preventing repossession by paying off an outstanding mortgage in full.
  • Funding property renovations, extensions or repurposing of any kind.

These are just a few of the reasons why everyday borrowers across Britain are turning to bridging finance. Along with flexible and affordable repayment options to suit most budgets, bridging loans are even accessible for applicants with poor credit. Book an appointment with an independent broker if you have any questions or concerns regarding your eligibility or credit history.

The pros and cons of bridging loans

Like all secured loans, bridging loans bring their own unique advantages and disadvantages to table. Each of the following should therefore be considered before submitting your application for a bridging finance loan:

Pros

  • Access to the money you need in as little as five working days
  • The opportunity to repay in full at any time and without penalties
  • Exceptionally low interest rates of less than 0.5% per month
  • Minimal additional charges and stealth borrowing costs to worry about
  • Open to borrowers with a poor credit history
  • Can be used for almost any legal purpose

Cons

  • Bridging finance can become expensive in the event of non-payment
  • Available exclusively against qualifying properties and assets

In summary

Bridging loans are unique financial products with an extensive list of applications.  They can also be exceptionally affordable when repaid within the shortest possible time.

Whatever your requirements for bridging finance, getting the best deal can be simplified by consulting with an independent broker. Compare bridging loan rates from as many specialist bridging lenders as possible to find an affordable bridging loan to suit your requirements and your budget.