Bridging loans – the truth behind the common misconceptions

Thursday, 03 November 2011 05:27

Find out the truth behind bridging loans

For many people, bridging loans have been an effective way of getting the money they need quickly. However, there remain several misconceptions about them so if you're unsure whether a bridging loan is for you, it's a good idea to ignore these mistruths and make sure you find out the facts.

Although thousands of Britons have turned to these products for assistance with meeting a range of financial goals in recent years, quite often they are viewed as only being useful for buying property.

Most of those who apply for a bridging loan do so with this reason in mind, but this certainly isn't the only objective that can be realised.

Some people have used them as a way of paying for home improvement works or funding major purchases – such as cars – while other borrowers choose to get them in order to consolidate multiple debts into a single monthly repayment.

However, it is not only private individuals who can obtain a bridging loan. They can also be an effective way for businesses to borrow money, whether it's for assistance in purchasing a commercial development or to inject capital into a firm. Regardless of whether you wish to borrow for personal or corporate reasons, bridging loans can be taken out for virtually any purpose, so there is no need to think that this is an option that won't be open to you.

Many people also believe that bridging loans – by default – are extremely expensive. While they are designed to provide quick finance at short notice, they actually remain very competitive. As is the case with all other financial products, by comparing bridging loan rates from a range of providers you should be able to get a reasonably priced deal.

Perhaps one of the biggest misconceptions about these products is that consumers believe that having an imperfect credit history will automatically prevent them from being able to apply for a loan.

However, this is simply not true and even if you have had problems with repaying store and credit card bills and have upcoming county court judgements this shouldn't act as a barrier to being able to successfully apply for a loan. As long as you own your home and are not presently bankrupt, a bridging finance provider will always consider your application.

It is also worth remembering that the process of applying for and receiving a bridging loan is very quick and that if you have heard rumours that it takes weeks to get one, you ought to discount these. Upon receiving your application, a bridging finance provider will tell if you have been successful within the space of 24 hours. Provided this is the case, the cash could be transferred just a few days later, leaving you to go ahead and spend it as you like.

If you are unsure whether a bridging loan is right for your situation, you should endeavour to seek out advice from an expert. That way you can get the answers to any bridging loan questions you may have and dispel some of the myths and misconceptions that surround these products, before deciding what your next step should be.

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