If you are looking to get a bridging loan with bad credit, then good news, you can without an issue. This guide will give you some information on ways to get a bridge loan with poor credit
Tip: Use this free bridging loan calculator
Bridging loans with bad credit from UK lenders
Getting a bridging loan in the UK with poor credit is actually a lot easier than you may think. This is mainly down to bridging loans being asset-based loans that give good guarantees for the lenders.
What is a bridging loan?
A Bridging Loan is taken out when funds are needed for a short period of time, usually to help with a house purchase if your funds are unavailable due to waiting on your existing property to sell. They can be used for development loans, auction loans and asset finance.
Bridging loans are a great way to help bridge the gap when high amounts of cash are needed in a short period of time. They are available for both personal and commercial clients alike with impaired credit.
Why bridging loan companies are flexible with poor credit
Many bridging loan lenders are flexible with clients that have poor credit. Paying your repayments could also improve your credit score if payments are paid on time, this could then help in the future with a mortgage.
Mortgage lenders are concerned that bad credit is a high risk of defaulting payment, therefore could then refuse a mortgage application. Bridging loan companies are more interested in the value of the assets than they are in bad credit.
Some of the mainstream banks such as Halifax offer bridging loans could take into account credit history when taking out a bridging loan. This is common with high street lenders as they are bound by strict guidelines and are not usually flexible.
A bridging finance or development lender not on the high street would be less strict on lending criteria. This is because specialist lenders focus on the assets that would be secured against the loan.
Do you need more assets for bad credit bridging loans?
Assets that can be secured against bridging finance are property, cars and any other high-value assets. A valuation would need to be carried out on these assets which would be instructed by the lender on application.
We work with adverse credit bridging loans every day and can refer you to lenders that are happy to approve poor credit status bridging loans.
Many of our clients have bad credit history from previous credit issues. There are specialist lenders that The Bridging Loan Company can access to get you short term bridging finance. By using our brokering services we can immediately speak to our lenders who specialise in poor credit.
In most cases bridging loans are not affected too much by adverse credit as the loans are secured against existing assets, in most cases, this takes place over 12 months. If the loan is not repaid, the property can be sold to provide repayment funds. Due to adverse credit not usually been a barrier to been accepted for bridging loan interest rates may be the same as a client who has good credit.
Loan Corp will give you expert mortgage advice on how we can help with your bad credit bridging finance application.
With a bridging loan, you could pay monthly over the term of your loan agreement or alternatively roll the interest and loan amount up. This would then be payable at the end of the term in full as agreed with the lender. This is known commonly as the exit strategy. We have a guide on the pros and cons of bridging loans if you need some advice on how they can work.
From enquiry to payout, the process of getting a bridging loan was simple and efficient. I would highly recommend.
If you have a poor credit score and are looking to bridge the gap on a property purchase we are sure to be able to find a lender suitable for your needs. You can use our bridging loan calculator to get indicative rates on a bridging loan or even a development loan calculator if you are looking to develop.
Here at the Bridging Loan Company, we can assure you that our team of packagers will keep you in the loop at every stage of your application. If at any point we require to look into your credit rating we would ask your permission beforehand.
We would never perform a credit check without our client’s prior permission and signed waiver form for development finance or bridging loans alike.
We work with a range of lenders that are authorised and regulated by the Financial Conduct Authority and are registered in England and Wales.
Whether you have had previous defaults, missed payments on credit cards or CCJ’s we are sure to be able to help. With our panel of over 200 UK bridging finance lenders, we will find you the best rates for poor credit bridging finance.