For anyone interested in short-term finance may want the bridging loan interest rates UK explained and this article will help.
However, it’s important to appreciate that the bridging loan is a short-term secured finance and is usually for a property transaction but they are also available for a wide range of purposes.
As a short-term financing option, bridging loans tend to be slightly more expensive than those from a mainstream lender so someone borrowing must have an exit strategy in place when they apply.
Repay their bridging loan
Essentially, this means that the borrower will know how they are going to repay their bridging loan when it falls due; for instance, they may be getting a mortgage on a property they have refurbished with the bridging loan.
Which brings us to the question of the interest rate payable for a short term bridging loan and the answer is not that straightforward.
That’s because lenders have a variety of rates that are applicable and a lot depends on the borrower’s own circumstances, the purpose of the loan and what security the borrower is providing for it.
This means that the interest rates for the amount will vary so it will pay to shop around to find not only a good provider but one who is offering the best rate of interest.
One way of doing this is to contact the helpful team at The Bridge Crowd who will be able to offer help and guidance.
The interest rates for UK bridging loans may vary
When it comes to appreciating the interest rates for UK bridging loans may vary, for instance, from 0.55% to 1.5% the borrower also needs to understand this is the amount for every month of the loan itself.
Most lenders also enable the borrower to repay the bridging loan early without a penalty charge and it should be appreciated that as a form of short-term finance, most borrowers tend only to use them for a few months though lenders will lend for up to two years.
In addition to the rate of interest payable, the borrower should appreciate that they may also be charged an administration fee by the lender and there may also be a commission charge for the bridging loan broker as well.
These costs will add up and while they may make a loan more expensive than from a high street bank, for instance, they do deliver flexibility and they can be arranged quickly – most lenders will be able to arrange a loan within a few days depending on circumstances.
Essentially, anybody who wants to know about bridging loan interest rates UK needs to appreciate that their own circumstances and the purposes of the short-term finance will be crucial to getting the best possible interest rate available and the team at The Bridge Crowd can help with more information.