Bridging Loan Lenders
What type of lender offers bridging loans?
Bridging finance can be secured from accessible lenders such as high-street banks, but it may be best to compare your available financial options before rushing in.
Because bridging finance is an alternative finance option, the pool of specialist lenders may be smaller than traditional property finance – meaning it is also challenging to find the right lender and the best deal without specialist help.
In this scenario, many find it helpful to seek an expert, a broker who knows the market and has access to specialist lenders. We can package your case, bring it directly to an appropriate lender and expedite the entire process for you.
How can a bridging loan broker help find the right lender?
The benefits of applying for finance through a broker are mainly in the options it allows, and the time it saves.
Brokers can speed up the application process to a matter of days and prevent mistakes for the inexperienced.
With a bridging specialist, you can get the advice needed to point you toward suitable lenders based on your needs and avoid the challenges of going to lenders directly.
We have access to the short-term loan market and have established relationships with specialist lenders. And most importantly, we can get you bridging finance at a favourable rate.
What is the average interest rate offered by lenders?
The average rate on bridging loans from high-street banks and mainstream lenders is influenced by the Bank of England base rate - between 0.39% and 1.5% per month.
Lenders will consider your circumstances and purposes for the loan – meaning the interest rate applied could be higher depending on the case's complexity, how long the loan term is, or if it falls under a niche field of lending.
Seeking the help of a specialist broker can simplify the process. We can secure you a lower interest rate by working to find you the most suitable deal for your circumstances and at a quicker pace than you could otherwise.
Interest can be “rolled up”
Additionally, with bridging finance, interest rates are more expensive. This is due to the short-term borrowing – typically over 12 months (up to 36 months).
Beneficially, bridging finance offers “rolling-up” on interest where traditional finance does not – typically, with a mortgage, you would pay an annual percentage rate (APR), but instead, interest is paid monthly.
With bridging finance, you have the option to pay off the outstanding interest before the term ends without incurring early repayment fees.
Are there additional costs from lenders?
Lenders will need security, typically in the property that the bridge loan will be set against. The application process will involve a valuation of your property – an appraisal which will come in the form of an additional fee. However, valuation can be made cheaper through a desktop or drive-by valuation instead.
There are also arrangement and legal fees to consider – this is why it is essential to work through a broker who can bring these additional costs down alongside securing you a favourable interest rate.
To get an indicative quote on a bridge loan, you can use our free bridge loan calculator – it will give you a general idea of how much you can expect to pay and compare rates from different lenders.
Who are the best types of lenders for bridging finance?
Any reputable lender will be looking for a borrower’s exit strategy – therefore, it is important to recognise that bridging finance requires a solid plan with calculated costs. The majority of lenders will need security in place to mitigate risk.
We can help find reputable, transparent lenders regarding fees who are both knowledgeable and experienced in complex or niche scenarios.
Ultimately, seeking the advice of a specialist bridging advisor will save you time and money when searching for a reputable lender suited to you.
