The tough financial economy has left many individuals suffering from bad credit and even larger credit issues. These situations make it increasingly difficult for applicants to secure the financing they need to continue on with everyday life – bad credit can affect an individual’s chances of securing loans such as mortgages, personal loans, and credit cards.
When credit ratings are one of the first components lenders look at to gauge eligibility, even past credit problems can come back to haunt those looking to meet financial needs. Luckily, bridging finance is available, even to those who suffer from poor credit.
Basic Information on Bridging Loans
Bridging finance is a short-term financial solution to help individuals correct funding situations and even bridge time periods while they look to secure long-term funding. Raising capital in this manner is usually a simple, quick process and repayment terms for bridging loans are usually as little as 12 months but can be extended depending on the repayment plan chosen by the applicant.
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Since these types of loans are short-term and arranged quickly, they do come at a higher cost than a traditional loan – interest rates for bridging loans can reach up to 2 per cent per month which can add to the loan’s overall cost.
Important Benefits of Bridging Finance
While there are many benefits to using bridging loans for a wide variety of applications, there are a number of great benefits that bridging finance presents specifically for those with poor credit. Generally, bridging finance lenders are more flexible when it comes to issuing a loan – when the property security is in place, lenders are more comfortable and more likely to extend financing without taking a poor credit score into too much consideration.
Additionally, these loans are arranged quickly, making it possible for borrowers to get any financial issues resolved fast and help get their credit score back on track.
Obtaining a Bridging Loan with Poor Credit
Before applying for a bridging loan, or any other type of financing, it is important to consult with a professional finance broker to better understand a financial situation and better help to find the best possible solution. The team at Jubilee is available to answer client’s questions and secure them the best possible deals on a bridging loan.
A dedicated finance broker will thoroughly explain how a bridging loan works and what information and processes are required to submit an application. Additionally, the broker will evaluate each unique situation and ensure bridging finance is the right option.
If a client is concerned about past mortgage arrears or CCJs in their credit history, it may be possible for them to qualify and apply for a non-status bridging loan. If an applicant meets the minimum requirements, this loan can be arranged regardless of income status or credit history – essentially, the applicant’s credit history is ignored.
Bricks And Mortar As Security
But it is important to note that clients interested in this type of financing will be required to meet the minimum owned property security requirements and be able to provide a credible exit strategy which can be explained and outlined by a Jubilee representative.
When considering what can be used as security, it is important to note that the standard for security in the United Kingdom most often takes the form of a property that is owned. If using a property is not an option, some lenders will consider other assets.
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Additionally, an applicant’s exit strategy, or plan for paying back the loan, must be solid. For example, if a borrower is using bridging finance to purchase a new home, the subsequent sale of the old home and repayment of the loan would be a credible exit strategy. Lenders will closely evaluate an applicant’s plan before approving the loan.
Bridging finance is often the perfect solution for those in financial binds. But, before jumping into this type of short-term loan it is important to speak with a professional and consider the risks and costs against the benefits. The knowledgeable team at Jubilee is ready to take your questions and help find the perfect financial solution to fit your unique needs and your budget, whether it is bridging finance or one of our other lending options.
Do not let poor credit hold you back – financing is available for those who have bad credit histories and Jubilee can help secure the financing that is needed.
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I saved my home by getting a bridging loan with the help of jubilee. With no arrears I can get a mortgage as I have good income now.