For those interested in short term finance then the question of bridging loan rates will be asked and this article will explain what they are.
Firstly, though, a short-term bridging loan is becoming an increasingly popular way to access short-term finance for those who need to make an expensive purchase and while they don’t have the money currently they will be able to repay the loan when it comes to an end.
Property buyers and developers, for instance, use bridging loans to access cash quickly so they can purchase a property at auction or refurbish a property for selling when the capital to repay the loan will arrive.
Bridging loan interest rates UK
Because of their nature, bridging loans will cost slightly more than a loan from a mainstream lender and bridging loan interest rates UK, or the APR, are going to be higher to reflect the loan’s short-term nature.
The interest rate also underlines the need for those accessing this type of finance that they need to pay it off quickly.
Bridging loan rates UK
For this reason, bridging loan rates UK vary and they tend to be more expensive when the bridging loan is for higher amounts so the borrower needs to be confident that the capital they are expecting to repay the loan will arrive.
In addition, there is usually an administration fee to pay when the loan is arranged and some also have exit fees too. Most lenders will charge a small percentage as the admin charge which for smaller amounts is quite reasonable but this could add up for larger amounts.
Consideration for bridging loan rates
The other consideration for bridging loan rates is that there is no market rate since lenders will offer a variety of interest charges so borrowers interested in bridging loan finance really should shop around to find a deal that suits them and their circumstances.
While this article mentions the popularity of bridging loan finance with property developers and buyers, they are also growing in popularity with business owners as well as landlords looking to develop their buy to let portfolio.
For instance, business owners may find they need to buy stock in for a seasonal or special event and know that their profits will more than cover the bridging finance while landlords will be able to access large amounts of money to buy homes to rent out.
For help and advice about any aspect of short-term finance including bridging loan rates, then contact the helpful team at The Bridge Crowd for more information.