For anyone, including businesses, who are looking for access to quick finance then the reasons why you need to understand bridging loan interest rates UK is important.
This article will explain why since it will soon become apparent that there are no fixed rates for bridging loans.
That’s because the loans themselves are quick to arrange and flexible and can be used for a range of purposes from buying a property, refurbishing business premises or even buying a house at auction.
The borrower’s own circumstances are also key since the value of the property they put up as security for the loan will also have an effect.
In addition, the length of a bridging loan will also influence the interest rates being charged and these criteria will vary from lender-to-lender.
Learn more about bridging loan rates
However, by contacting the helpful team at the Bridge Crowd, you will be accessing years of expertise and experience to learn more about bridging loan rates and how quickly they can be arranged.
Indeed, there are several costs that borrowers must consider when thinking about taking out bridging finance with the interest rate is the most important.
The interest rate on the loan will usually be expressed at a monthly rate.
There’s no hiding the fact that the interest rate being quoted will when compared to high street banks, for instance, appear to be high. It’s for this reason that bridging finance tends to be used for short-term funding options.
As mentioned previously, there are other costs to consider because they can add up quickly but most bridging loan finance firms will have a calculator on their website to ensure you can work out easily what a potential loan may cost.
Bridging loan rates UK interest
In addition to the bridging loan rates UK interest charge, it is important to appreciate these vary for the period you have the loan though this can be ‘rolled-up’ so the interest charges are deferred until the loan is repaid in full.
If you opt for a ‘deferred’ bridging loan then there’s no need to make a monthly payment but you must repay the loan by the agreed term date.
Another potential cost is the lender’s arrangement fee, sometimes known as the facility fee. This is usually a percentage of the loan’s amount, it’s usually between 0% and 2%, and will be included in the loan.
Some lenders also have an exit fee which is the facility fee and is added to the loan amount when the loan needs to be repaid. It must be appreciated that there are lots of bridging loan providers who do not charge an exit fee.
Potential borrowers need also to be aware of administration fees for the loan provider to process paperwork and there is also the cost of legal fees which will also vary, depending on the lender you are using.
Security being put up for the bridging finance
Let’s not forget also that the security being put up for the bridging finance will also need to be valued and this fee for a surveyor will need to be paid for; it also tends to be the only upfront cost since this work needs be done before the loan is arranged.
Finally, while accessing a bridging loan is quick and easy, certainly more so than from high street banks, borrowers need to appreciate that they are at a concessionary rate of interest.
This means that they will need to abide by the loan’s terms such as paying on time so they enjoy the lower rate.
Failure to abide by the loan’s terms, for example, should you need to extend the loan, or miss a payment, then the lender may choose to charge a higher rate of interest on the amount outstanding.
It’s these factors that have a potential influence on the interest rates for a bridging loan and the interest being charged is calculated on a monthly rate of interest.
As mentioned previously, this is to reflect the short-term nature of the finance since the money will be needed for several months rather than several years. It will also be explained that should you only need the money for just one, then you will be charged a full month’s interest.
Bridging loan interest rates will vary
Again, bridging loan interest rates will vary depending on the loan-to-value that the lender works to and whether the lender has a first or second charge on the property being used as security.
Also, the type of property itself may also influence the rate of interest, as will its condition and location.
Essentially, when it comes to understanding bridge bridging loan interest rates UK, then it’s time to speak with the experts at the Bridge Crowd.