Bridging Loans For Bad Credit
There are various bridging lenders that will consider a history of bad credit. Using your property as security, it is a good starting point because you are leveraging the asset’s value in order to obtain the funds you need. At Bridging Loan Hub, we work with non-status bridging lenders that are willing to work with customers with adverse credit and they do not use credit checking as part of their decision process. Instead, the lenders use their experience to understand the value of your potential project and your plans for it too. To receive a no obligation quote, simply contact us using the form below.
Bridging Loans With Bad Credit – How it Works
If you have poor credit, there may be some slight adjustments to your loan agreement, including:
- Lower LTV (whilst the maximum offered by most lenders we feature is around 70% to 75%, this may be slightly lower for those with bad credit).
- Elevated interest rate – the rates charged by bad credit lenders is slightly higher than regular lenders to mitigate the potential risk of default.
- No lending on primary residence – for non status lenders, they typically will not lend to someone if it is their primary residence i.e where the person lives. Your options may involve borrowing against another property, for business or investment purposes.
What Alternatives Are Available?
Mezzanine finance: This is a useful option which combines part loan and part giving up a share of your overall profit. Since the lender is taking on more risk, they want a piece of the potentially lucrative opportunity. This is a way to finance high risk ventures in property but also helps those with poor credit histories. Read here about our mezzanine finance lenders.
Improving your credit score: There are several ways nowadays to improve your credit score. The simple ways are to add yourself to the electoral roll (if you haven’t already), close any credit cards that you do not use, repay any loans early that you can afford to do so and also get in the habit of paying loans on time.
Whilst this is not easy, there are specific credit cards designed to help improve your credit rating and if you have successfully cleared out other personal or short term loans, this will reflect positively on your credit file. You can always access your report from the UK Government for just £2 and you can pick out what you can improve.
Added security: You can always look at adding further security to your existing project which may be considered by the lender of choice. This could include adding other valuables or asset such as a car, our having someone to be your guarantor to co-sign your loan agreement.
Avoid short term loans: You probably want to avoid the payday bad credit route as this will could be deemed negatively by a potential mortgage advisor. Instead it is better to promote a cleaner credit profile and improving your credit score is a good way to achieve this.
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