One of the important questions to ask when considering short term bridging loans UK is how much they will cost.
There is no straightforward answer since all bridging loan lenders operate to different criteria so will offer different rates for their loans.
In addition, many lenders also offer a bridging loan without interest needing to be paid every month and will ask that this is paid when the loan falls due.
Bridging loans UK are used for a variety of needs
Essentially, bridging loans UK are used for a variety of needs and so the criteria for each one will be different.
For instance, a borrower may be able to access a bridging loan at 0.59% for a relatively small amount of money and up to 1.5% for larger loans.
Along with a variety of lenders, they also offer a variety of bridging loans and some may offer just a few thousand pounds while a competitor may offer several million pounds; a lot depends on what the lender asks for as security.
However, one of the best ways to estimate whether a bridging loan will be suitable for the borrower’s needs is to use a bridging loan calculator.
Lenders will have a bridging loan calculator on their website
Most lenders will have a bridging loan calculator on their website and the borrower will simply enter the amount of bridging loan they require, the relevant monthly interest rate and how long the term of the loan will be in months. They then press ‘calculate’.
In response, the bridging loan calculator will deliver a set of figures including the lender’s fee, which could be up to 2% of the loan’s value, a possible broker’s fee, the amount of interest to be repaid every month and the total amount repayable when the loan falls due.
For those who are new to bridge funding it may appear that the loans are more expensive than a high street lender will offer but there are a number of reasons for this.
In addition to being flexible, the loan can be arranged within a few hours in some circumstances, the application for bridging finance is straightforward.
Bridging finance a growing form of borrowing
It’s this element of efficiency and flexibility that makes bridging finance a growing form of borrowing for lots of customers who then use the money for a variety of purposes.
While many customers will be property developers and buyers looking to purchase a property, bridging finance is also popular with businesses who have a cash flow issue or who may want to buy stock for a promotion.
For more help on how much short term bridging loans UK will cost, then contact the helpful team at The Bridge Crowd for more information.