Bridging loans are definitely short term solutions that are frequently used for facilitating something else that is happening.
They are primarily utilized to raise short term capital quickly when conventional borrowing options are not available.
What Are The Benefits?
In general, bridging lenders like our team at Maxiron have the capabilities of completing applications much faster when compared to the mainstream lenders.
The projected repayments are usually included in the loan, which means they do not need to be paid monthly. This assists with cash flow and can assist borrowers that are not able to afford the added costs of the bridging loan.
The lenders can be more flexible when it comes to property conditions, which makes these loans ideal for refurbishments.
If you are buying from an auction, you can agree on a loan before you start buying. If you have bad credit or you are in arrears, bridging lenders can be more relaxed as your loan repayments will be included in the loan.
The bridging lenders are also more open when it comes to using several properties as a form of security. The rule of thumb, in general, includes that if the borrower has ample equity, a secured means to repay the loan back quickly and they can offer security that is suitable, the more likely they are to secure one of the bridging loans. However, this doesn’t always mean that this is the only or best solution. For this reason, is always a good idea to consult with an expert about any other available alternatives.
Can A Bridging Loan Help Your Credit History?
If your credit history is poor and you secure one of the bridging loans, then you repay the loan back on time, your transaction may be recorded on your credit history. This may assist with improving your credit score.
If possible, it is also helpful to improve your credit score before you take a bridging loan, which increases the likelihood of securing the loan. There are various ways to go about this, such as avoiding the overuse of credit cards, paying all your bills and debts on time, avoiding taking loans from payday loan businesses, and not applying for any more loans until your score is healthy.
Is It Possible To Apply For A Bridging Loan With A Poor Credit Score?
If you would like to know how to apply for bridging loans and your credit score is poor, you should get in contact with our experts at Maxiron. These experts will be able to evaluate your situation as an individual and then make an assessment of your current circumstances.
It is important that you are honest about your credit score and history so they can use all these facts to produce an accurate assessment.
What Is Involved In This Process?
Your advisor will know what type of documentation and information you will need to provide to a lender. Borrowers are typically requested to nominate assets in the form of security. Assets which might be considered include property or other high-value items such as business equipment.
Loan applicants should also be able to come up with what is known as an “exit strategy”, which involves the plan on how and when their loan is going to be paid back. This should be easy to achieve and practical.
For instance, if paying back the loan involves selling a property, the price of this property should be sufficient to cover this loan. In addition, the property should be easy to sell quickly. This is an example of an exit strategy that may be viewed as acceptable by the lender.
Bridging loans are either open or closed. The closed loans will include a repayment date that is set, while open loans won’t, yet payment will be required before the period of the loan runs out. There are also usually no fees attached on early repayments.