When to Apply for a Bad Credit Bridging Loan

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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 into 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 with 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 be 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 while waiting for your current home to sell. You could be a business owner or experienced property developer who was 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. 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.