Bridging loans are usually taken as a short-term borrowing tool, aimed to bridge a gap in funding. Bridging loans can be used to buy a property if yours has yet to sell or if you were to buy a property at auction and required the cash immediately.
Like other types of secured loans, a bridging loan will require collateral, meaning if you were unable to keep up with repayments, your collateral could be at risk.
Our chosen partner Fluent® allow you to search the market for the right deals catered to your financial situation and needs.
Is a Bridging Loan the right option for me?
Deciding if a bridging loan is the right choice for your needs depends on your personal circumstances, your financial situation and what it is you are looking for when it comes to borrowing.
If you are looking for a short-term loan for a large sum of money and you are able to repay the loan relatively quickly, then a bridging loan may suit you.
An example scenario of a bridging loan could be: needing to buy a new property prior to your current home being sold. In this scenario you would be able to pay back the loan quickly, upon your house sale completing.
As with all financial related products, you should always carefully consider your options, since you could risk losing your collateral if you were unable make your repayments. There are however good reasons to consider a bridging loan:
Flexible Borrowing
A wide range of loans available in the lending market offers you choice and flexibility. You can opt for fixed or variable interest, or an open-ended or closed loan term. If you do decide to repay early, some lenders will not charge early exit fees.
Bigger Borrowing
Bridging loans will often let you borrow large amounts of money, like secured loans there is a collateral requirement.
Quick To Obtain
Bridging loans can be paid to you in a matter of days, unlike traditional loans or mortgages which can take several weeks to be approved.
Potential Uses for a Bridging Loan
Bridging loans are able to be used for multiple reasons in order to help you to bridge the gap in funds you require, this could be for:
-Home renovations such as an extension
-Funds to purchase a property at auction
-Funds to buy a second property
-Purchasing Land
WHAT TYPES OF BRIDGING LOANS ARE AVAILABLE?
Fixed or Variable Rate Interest
With a bridging loan interest rates can be either fixed or variable.
The main advantage of a fixed interest rate is the security of knowing your payments will stay the same for the length of time selected.
Variable interest rates will normally change when the Bank of England changes its base rate.
First Charge & Second Charge
Upon taking out a bridging loan, a charge is placed upon your collateral (property or asset) – this legal agreement states the order in which lenders will be repaid if you were unable to keep up with repayments. If for example you already have an existing mortgage, then the bridging loan would be deemed as the second charge.
Open Bridge Loan
This means there is no fixed or set date allocated to pay off the loan, however you will normally be expected to repay within a year. An open bridge loan may be suitable if you have found your dream home and want to buy, but have yet to sell your current home.
Closed Bridge Loan
Closed loans will have a set date for repayment of a loan. Closed bridge loans are normally only required for short timeframes, so could be suited to those selling a property, but awaiting completion to receive funds for their new home.
If you’d like to speak to the friendly UK based team please call – 0800 470 3753
How to apply for a Bridging Loan
Searching for a Bridging Loan with SavingSuperStore is simple with our partnership with Fluent®
You will you get access to their expert UK advisors and get a quote in minutes!
Tell Us About Yourself
Let us know a few details and we’ll do the hard work!
Our partner will search the market
The dedicated experts will then showcase the loans you’re eligible for
Discuss your options
You will be contacted to discuss your personalised loan options. Once you’re happy, a full application will be made.
FAQS
Your property may be repossessed if you do not keep up repayments on your mortgage.
Think carefully about securing other debts against your property. If you are thinking of consolidating existing borrowing you should be aware that you may be extending the term of the debt and increasing the total you repay.
Fees may be charged dependant on provider.
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