Personal bridging loans can be an attractive option under varied circumstances. Many people in the UK take out these loans due to the flexibility they offer. Bridging finance lenders provide personal bridging loans on flexible terms. Bridging finance offers capital injection for a short-term duration. Bridging is an ideal option for generating quick cash without being constrained by the restrictions of unsecured lending.
In this article, we will be exploring how bridging can be a great fit for personal loans. It is recommended to consult a bridging loan UK broker before proceeding further to know whether it’s better for their situation or not.
Facts About Personal Bridging Finance
Personal bridging loans are a variable form of finance. These short-term loans are commonly availed for the following reasons:
- Paying for inheritance tax
- Home improvements/renovations
- Purchasing a new vehicle
- Meeting unexpected expenses
- Making a large cash purchase such as a houseboat or motorhome
- Covering the cost of repairs
- Paying tax bills
- Immediate cash flow requirement
Requirement for personal Bridging Finance
Personal bridging finance is not hard to get; the application process is quick, and loan terms are flexible. The borrower must be the following requirements:
Age of Applicant:
The applicant should be over 18 years of age; some bridging lenders also specify an upper age limit.
The applicant should be a resident of the UK or have a registered address in the UK.
The loan is offered according to 70% of the property value; the borrower is supposed to deposit 30% of the property value as a security.
Bridging finance is secured against property of any type, whether commercial or residential. The property is acceptable in any condition, such as un-mortgageable, dilapidated or uninhabitable.
These loans can be secured against valuable assets such as precious jewellery or gems, expensive cars, watches, antiques etc.
An exit plan is a route with which you repay the loan. A viable exit plan is crucial for bridging finance. Bridging lenders are most concerned about an exit plan. An exit route for personal bridging finance can be the proceeds of selling a property or an inheritance.
For instance, if a borrower takes out a bridging loan to cover the cost of refurbishing a house before sale. This loan can be repaid with the fund generated through a house sale. Another example of a personal bridging loan is if a borrower takes out bridging finance to cover tax bills on the increased value of their assets because these heavy tax bills are hard to pay in one go-through salary. This loan can be repaid through a monthly salary in a lump sum.
How is Personal Bridging a good option?
Bridging is the most flexible form of short-term finance; also, it can meet the needs of the market and the customer, which is why bridging finance is considered an excellent option for personal loans.
- Loan term: Bridging finance as a personal loan is offered for an initial loan term of up to 12 months; other options are also there to refinance and extend the loan arrangement.
- Quick Funding: Besides being flexible, personal bridging loans are incredibly fast; the funds can be available in as little as 24-48 hours.
- Quick Application Process: The application process is also quick and seamless.
- LTV: You can borrow up to 70% Loan to Value (LTV). Bridging lenders may also offer 80% LTV or even up to 100% depending on the security
- Interest rates: Interest rates start from 0.74% per month. There are three options for paying interest, i.e., monthly, rolled-up and retained. You can pay interest on the loan in a lump sum instead of every month.
- Fees: No early repayment charges or exit fees. But there are other fees and costs involved, such as arrangement fees, administration fees, legal documentation fees, survey and valuation fees and solicitors’ fees.
- Loan repayment: Personal bridging loans can be repaid in a lump sum; no monthly payments are required.
- No extra checks: there are no extra checks on these loans such as credit score, income evidence or prior experience is required
- Poor credit: Borrowers with bad credit scores can also avail of personal bridging loans
- Diversity: Due to diversity, they can be used for several purposes
Limitations: Personal Bridging loans/p2p lending are secured against property. There is a risk that the property against which you have taken loans is at stake. The property against which the personal bridging loans are secured can be repossessed if you cannot keep up the repayments. The loan cost will be higher if you take longer to repay the loan; the quicker loan repayments, the lesser loan will cost you.
Due to being flexible, quickly available and short-term, bridging loans can be an ideal option for personal loans.