For anyone looking for an explanation of bridging loan rates UK then this article will help.
Firstly, a bridging loan is a type of short term funding that is growing in popularity because it’s a flexible solution to meet many needs.
The term ‘bridge’ describes the gap that will exist between a debt coming due and the money that will pay for it becoming available; in most cases, and historically, bridging finance was used for property transactions.
Essentially, the bridging loan helps someone complete the purchase of a home before they sell their current one with the lender offering access over the short-term to a large amount of money.
All borrowers need to appreciate the bridging loan interest rates UK
Bridging loans are also popular with property developers who can snap up a bargain buy at auction by arranging a bridging loan within the days after making a bid but they, and all borrowers, need to appreciate the bridging loan interest rates UK when doing so.
Also, property developers use bridging finance to develop or refurbish a property before selling it on.
However, in recent months and years the range of purposes for bridging loans has grown and so has the number of bridging loan lenders willing to loan money into this market.
It should be appreciated that the bridging loan rates being charged are usually higher than are being charged by mainstream lenders such as high street banks, for instance.
There are a number of reasons for this and the main one is, as mentioned previously, that they are flexible with a wide range of uses and can be arranged quickly unlike the application process of a high street bank, for instance.
Lenders do not have set bridging loan rates
This level of flexibility and range of purposes means that lenders do not have set bridging loan rates for the finance because this is determined on the length, the purpose as well as a borrower in some cases.
Other purposes for bridging loans include buy to let landlords looking to add to their portfolio as well as businesses looking to buy stock or even refurbish their premises.
The best way of finding out what a potential bridging loan rate might be for a borrower then most lenders have an online bridging finance calculator to find out what the costs of a loan will be and what the interest will add up to.
For anyone who would like to know more about what bridging loan rates UK are and why they vary so much between lenders and why this form of finance is more expensive than a high street bank, then the friendly team at The Bridge Crowd will be willing to help.