A significant rise in bridging loans has been witnessed over the last decade. If you are also interested in getting a bridging loan, this article is for you. The question arises from where you could get one; is it better to take a loan from the banks or specialist bridging finance providers?
We will be exploring prominent UK banks that are offering bridging loans. Bridging finance offers short-term finance solutions, ranging between 3 to 12 months. They are usually secured against residential or commercial property.
Here is the list of UK banks offering bridging finance:
- Barclays
- Halifax
- HSBC
- Lloyds
- Santander
- Nationwide
Barclays
Barclay is popular for providing services specifically to property developers. The bridging finance service offered by Barclays can be used for personal and business projects and other purchases, such as buying property at an auction and bridging the gap between buying and selling or developing the property.
Halifax
Halifax is a trusted high street bank, a division of the Bank of Scotland. Halifax allows you to apply directly for a bridging loan for personal and business use, purchase property at an auction, property development or renovation, and buy property before selling an existing property.
Halifax can be a good option if you take the loan for a shorter term. If you are taking it for a longer term, it can be expensive.
HSBC
HSBC has been providing financial services for 150 years in the UK. It offers bridging loans as well as traditional mortgages. You can take out the loan for instant cash flow, bridging the gap between buying and selling, or if you have a mortgage with HSBC, it can be a good option.
Lloyds
Lloyds was founded in Birmingham in 1765 and is now the largest retail bank in the UK. This bank offers specialist lending services, including bridging finance, to its customers but does not promote this service actively.
NatWest
NatWest- National Westminster Bank claims to be the most significant commercial bank, facilitating its customers, including private start-ups and multinational companies; its services also include bridging loans. This bank does not advertise this loan service outwardly; therefore, getting a bridging loan UK from this bank is not that easy.
Santander
It is a Spanish bank that started providing its services in the UK in 2003. Among its services include mortgage loans, corporate loans, and bridging loans. You can apply directly through this bank to secure bridging finance.
Nationwide
Nationwide has been providing financial services for over 175 years. Unlike high street banks, Nationwide is a building society owned by its members or customers. You can apply for bridging loans directly.
The procedure of Bridging loans with the UK High Street Banks
The applicants must follow the same application process for bridging loans as they are supposed to follow with the bridging loan companies.
Bank interest rates on bridging loans
The average monthly interest rates on bridging loans ranges from 0.4% to 2%. The interest is charged monthly, unlike APR. If the term duration is longer, you will have to pay higher interest; therefore, keep the term duration shorter to avoid higher interest.
Bridging Loan requirements
You are not supposed to provide a credit score if you are applying through banks; rather, they are more focused on the following:
- A viable exit strategy, meaning how you will repay the loan
- The applicant should be a resident of the UK or have a registered UK address
- Must be over 18 years of age
How long will it take to get funds through the bank?
If your case is straightforward, you can get funding within days, and if it is complicated, it may take a bit longer, almost up to a few weeks.
Pros of taking bridging loans with Banks
There are some advantages if you are taking out loans with high street banks; these are as under:
- After exiting from the bridging loan, you can line up a mortgage
- Bank’s regular customers can get favourable deals
- The UK also provides Bridging Loan Directory, which can help you find specialist bridging lenders in the UK.
- All finances are in the same place. This can help you in developing a loyal relationship with the bank.
Cons of taking bridging loans with the banks
If you directly apply for the loan with Barclays, you can miss the other good opportunities on your way. Therefore, shopping around, comparing lenders, and choosing what suits you the best is recommended.
High street bank or a specialist bridging finance lender: Which is better?
Many high street banks in the UK prefer offering mortgages but also grant bridging loans for residential and commercial purposes. The bridging loan/p2p lending process through a bank can be stringent and sluggish, as they are not experts in this domain.
On the other hand, bridging finance/ p2p lending companies offer flexible terms and instant service. Hence, it is recommended to take the help of a best bridging loan provider UK if you want to take bridging loans for residential or commercial purposes.
