The best reason for wanting to use a bridging loan calculator is to determine the cost of borrowing between lenders because not everyone is offering the same rate of interest or deal.
This means a borrower could save a small sum over the term of the bridging loan.
Interest rates on a bridging loan tend to be higher because of the convenience and ease of access they provide rather than the lower rates being charged by high street lenders, for instance.
In addition, the bridging loan calculator will also add in the administration fee being charged by the lender so there are no surprises. Some lenders may charge an exit fee as well and most will offer the opportunity of ‘rolling up’ the interest charges so the borrower has nothing to pay until the loan’s due date.
Short term bridging loans requirements
The bridging loan calculator is simply a few steps for a potential borrower to follow and will include details of the short term bridging loans requirements, for instance how much the borrower wants to borrow.
The borrower will also need to know how long they want the loan’s term to be and what they will offer as security; generally, lenders are looking for property to be used as security.
The bridging loan calculator will have how much the interest charge will be and how much the total amount of interest to be repaid will be should the loan run to its full term.
Alternatively, there’s also the option of determining what the gross loan amount and the rolled-up interest amount will be as well.
Lenders admin fee for all short term bridging loans UK
The lenders admin fee for all short term bridging loans UK will also be added and is usually around £300 but depending on the size of the loan and the loan’s purpose this could be more. Some lenders may also add potential legal costs for putting the loan together.
For borrowers using a bridging loan broker, then they will have a fee for putting the loan package together as well.
It should also be appreciated that the calculator will give an approximate guide to what the bridging loan costs will be and the interest rates may change regularly as may the administration fees; this means a potential borrower may use the bridging loan calculator one day and several weeks later the charges may change so they will need to recalculate the potential loan.
As a form of short-term financing, bridging loans are growing in popularity because they are quick to arrange and a bridging loan calculator will help anyone interested in accessing this type of finance decide whether it is for them and what the potential costs will be but for more help and advice on bridging loans and the calculator then contact helpful team at The Bridge Crowd.