Failure to repay a bridging loan could lead to repossession of the property/valuable asset that was used as security, however this is only ever used as a last resort. In addition to this, borrowers can also face adverse costs as a consequence for not repaying.
Lenders can work with struggling borrowers and rearrange their loan repayments to something more manageable. As a secured loan, bridging loans will need a valuable asset as security. This means that those with bad credit histories can be considered for this type of finance, however, it also means borrowers run the risk of losing their asset when failing to repay – which can often be their home.
With a bridging loan, as with any type of loan, it’s vital to ensure you are able to pay back the loan to avoid more costs and the potential repossession of your home.
The fees involved for a bridging loan can vary depending on the situation. Below is a list with some of the fees typical for this type of loan:
Interest rate
Arrangement fee
Legal fees
Broker fees
Exit fees
Valuation fees
It’s vital to understand the full cost of any potential loan before taking it out, ensuring that you’re able to keep up with the repayments and thereby avoiding the risk of costly consequences.
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