For anyone looking at short term finance will need to know what bridging loan interest rates UK are but the answer depends on the loan’s size and purpose.
All bridging loan lenders are upfront about the financing costs which will include administration fees as well as the interest rate to be charged.
It will be noticed that the rates are slightly higher than high street lenders, for instance, but this takes into account the fact they are quick to access and the rates will vary for the sums involved.
Indeed, most bridging loan providers offer access to a bridging loan cost calculator so potential borrowers can easily find a no obligation quote to see how much the finance will cost.
Some lenders will also tailor their bridging loan rates UK
In addition, some lenders will also tailor their bridging loan rates UK depending on the loan to value (LTV) of the financial arrangement; the more valuable a security the lender puts up means they can access the lower rates of interest because they are offering less of a risk to the lender.
Alternatively, for those wanting a bridging loan for between 75% and 100% LTV then they will be paying more in interest every month.
In addition, most lenders will charge around 2% for the arrangement fee of the loan’s gross or net amount though this may change with borrowers wanting to borrow more and will pay a lower facility fee. The loans themselves can vary from just a few days and up to two years.
One quick way of finding out what the interest rates are for bridging loans is to visit the websites of several potential lenders or bridging loan brokers and get a feel for the current market offering. Many of these lenders will also have a bridging loan calculator on their website to help the borrower understand the costs and interest rates more easily.
Bridging loan rates will depend on the borrower
Essentially, the bridging loan rates will depend on the borrower, the loan amount and the loan’s term as well as the security being put up for the loan itself.
In addition, the UK’s bridging loan market has become increasingly competitive in recent times and the rate of interest may also depend on the borrower’s circumstances because they are more appealing to a potential lender.
To put this into perspective, a bridging loan lender may advertise a 1% interest rate which would equate to an annual interest rate of 12%.
For more help and information about bridging loan interest rates UK then contact the helpful team at The Bridge Crowd.