It goes without saying that to apply for a financial product without first considering its advantages and disadvantages would be foolhardy. After all, every loan or mortgage product on the market has its unique points of appeal for specific borrowers and scenarios.
But what’s the story with bridging loans? What is it about bridging finance in particular that has brought about such extraordinary growth in the sector over the past couple of years?
Depending on who you are, what you need, when you need it and what you need it for, you may find bridging finance to be a uniquely accessible and affordable service. So whether ready to begin an application or still considering the options available to you, here’s a brief rundown of the five biggest benefits of bridging loans:
The process is quick
Right off the bat, gaining access to the cash you require by way of a bridging loan can be uniquely fast and effective. In fact, it’s possible for the loan to be paid out in a matter of days. Compare this with the several weeks typically required to underwrite a conventional loan or mortgage and it’s easy to see why those in a hurry are turning the way of bridging loans.
Limitless potential applications
Most traditional banks and lenders are very specific regarding the intended purposes they are and are not willing to consider when authorising loan applications. By contrast, a bridging loan can be used for absolutely any purpose whatsoever without a question being asked. Just as long as you can prove that you can pay back the loan as required, the justification for your application is inconsequential.
Rather than the bank having the final say on how and when you pay back your loan, bridging lenders are significantly more flexible. In terms of the full duration of the loan, interest payments and so on, those who choose bridging loans enjoy a much greater degree of flexibility.
Relaxed lending criteria
The vast majority of bridging loans are secured against an asset of sufficient value – usually a home or property of some kind. Which in turn means that the rest of the usual lending criteria are rendered obsolete. Credit scores, proof of income, current financial position and so on – none of these things matter if you can put up the required collateral.
Low fees and interest rates
Last but not least, bridging loans by their very nature tend to be significantly more affordable than comparable loans and mortgages from traditional lenders. Given that the loan in its entirety will typically be paid back within a few months, there are no excessive or on-going annual/monthly rates of interest to worry about.
If all of the above sounds good, you’ll need an experienced and 100 per cent independent broker to provide you with the advice and support you need. Rather than diving into the first bridging loan you come across, take the time to compare the market and consider every option available to you.
This article was provided by the team at Donkey Finance