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Bridging Loans

Using a Bridging Loan to Settle Inheritance Tax

Pay your inheritance tax bill with a specialist bridging loan product.

Bridging loans are a unique, short-term financing product that can be used to pay of all manner of urgent debts, including inheritance tax bills, HMRC tax demands and several other time-critical financial obligations that need to be settled fast. They are typically used to bridge a short term gap until a more permanent solution can be arranged and put in place, such as a commercial mortgage or some other secured loan product when it take a considerable length of time before the funds are released and made available to the borrower.

If someone has left you a valuable amount of real estate as part of a will settlement, and you need to settle the inheritance tax before you can sell the acquired property, then a short-term borrowing product such as a bridging loan secured against those assets will enable you to pay the outstanding amount off quickly and effortlessly.

Would I be better off with a second mortgage?

If the funds are only required for a short length of time, then a bridging loan is often the most cost effective solution. Unlike mortgages or second charge loan products, bridging finance can be arranged much more swiftly and the cost of borrowing is highly competitive in comparison. This is particularly true when you consider that a bridging loan is usually repaid in a matter of months – as opposed to the 10 to 25 years that a mortgage would last.

The interest itself is also charged on a monthly basis and can be added to the total cost at the end of the loan along with many of the other charges such as admin costs and broker fees. Additionally, there are no heavy exit charges to pay if you choose to settle early, depending on the individual loan product you apply for.

How much can I borrow?

Bridging loans can normally be sourced up to 70% LTV – and in some cases up to 100% Loan-to-Value, if you are able to provide additional security in the form of a second or third property that you own. The actual amount you can borrow will vary from one bridge lender to the next, and this could be anywhere from £25,000 to £25 million – although this too will depend on the level of security you can offer when applying for your loan.

Bridging Loans

When to Apply for a Bad Credit Bridging Loan

Bad Credit Bridging Loans – The Facts of Borrowing

If you have ever received marketing literature or seen any product advertising relating to secured loans and other borrowing products with low interest rates then you should always be fully aware that the rates advertised are not the rates that are typically available to everyone. In fact, only a small percentage of borrowers will qualify for these unrealistically attractive loan products and these are people with exemplary credit scores. If you have always managed your finances flawlessly in the past then you should have no trouble at all securing a great deal on a mainstream financing product. However, most borrowers do not fall in to this bracket, which is precisely why bad credit bridging loans were introduced in the first place.

With a bad credit bridging loan, the cost of borrowing and your chances of being approved for finance are not affected in the same way as most other loan types. Moreover, the lender is mainly interested in the security you can provide – which could be the equity in a homeowner’s property, a number of rental properties in a landlord’s portfolio or multiple commercial buildings if you run your own business. As long as the lender knows that they will get their money back – regardless of whether you default or not – your chances of being approved for this type of credit are exceptionally high and the interest rates are much more affordable than you might initially be led to believe.

What can bad credit bridging loans used for?

A short-term, asset secured borrowing product such as a bad credit bridge loan can be used for a wide variety of reasons. Perhaps you are looking to raise the funds to purchase a new property whilst waiting for your current home to sell. You could be a business owner or experienced property developer who hit by an unexpected cash flow crisis or a badly timed HMRC tax demand with very little time to pay. Whatever the reason for borrowing, bad credit bridging finance can be approved and paid out in less than a week, giving you plenty of time to make that last minute property purchase at auction or settle that urgent tax bill before it’s too late.

Bad credit bridging loans are ideal when:

  • You need to raise capital urgently and you have the required security in a number of residential or commercial properties you own.
  • Your borrowing history and credit score are not of a high enough standard to qualify for a loan sourced from a mainstream provider.
  • You want to borrow from £25,000 to £25,000,000.
  • You only require the funds for a short time scale. Typically, from one to 12 months.

Of course, there are other types of finance available for bad credit borrowers, although most of these options take several weeks to put in place and the interest rates can be costly.


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