Bridging Loan For 6 Months
Bridging loans are a type of short-term finance that offer a temporary funding solution when other types of borrowing are not available or appropriate.
Loan terms for bridging finance can be as short as required and usually go up to a maximum of 18 months, although longer terms may be available depending on circumstances. Bridging loans tend to come with flexible repayment terms, meaning you can usually repay early if required.
Can you get a bridging loan for 6 months?
Loan terms of six months on bridging finance are perfectly possible, although many borrowers will look for a longer loan term with the option to repay early to give them some leeway in case unexpected events delay repayment.
To get a bridging loan, you normally need to specify an exit strategy, explaining exactly how you will repay the loan. This exit strategy may give a specific date for repayment e.g. if you have sold your home and exchanged contracts and are simply waiting to complete.
Alternatively, your exit strategy can be open, meaning you specify the means of repaying the loan, but not the exact date on which it will happen.
How much will a bridging loan for 6 months cost?
The main costs of a bridging loan are:
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The arrangement fee (usually 1-2% of the capital – charged when the loan is first taken out)
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The exit fee (again, usually 1-2% of the capital – charged by some, but not all, lenders when the loan is repaid)
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Interest (normally charged monthly or as a lump sum when the loan is repaid)
The shorter the loan term, the less you will pay in interest and therefore the cheaper the bridging loan will be.
Find the best interest rates on a bridging loan for 6 months
Our free bridging loan calculator can help you find the lowest interest rates and fees on a bridging loan for 6 months. You simply need to share some basic information about your borrowing needs and financial situation and we will do the rest, showing you the best deals from across the market.
Need a bridging loan for 6 months? Get in touch with our friendly expert team of loan brokers using the contact form on the right or by calling 0117 313 6058.
Bridging Loan Case Study:
Bridging Finance: Required For 6 Months
Capital raised: £750,000
Area: South England
Situation: The client needed a bridging solution in order to secure a retirement property.
The client was looking to downsize and had found an ideal property in Dorset. The client was not able to proceed as their property in London had only recently been put on the market.
Not wanting to lose their dream propert, a bridging loan was set up with a 6 month repayment term. The client was confident that their property would sell before then, but wanted the peace of mind for any unforeseen hold ups in their property transaction. If the bridging loan was repaid early there would be no early repayment charge.
With the bridging loan secured over both the new and their existing properties, the client was able to reduce the cost of the loan. Once the necessary paperwork was completed, the loan allowed the client to secure their new home. The client's existing property was sold quickly and the proceeds of the sale paid off the bridging loan after 3 months.
Commentary:
This bridge finance allowed the client to achieve their objective of securing a property in their preferred location, heading off the competition due to their ability to raise finance quickly.
To discuss your bridging loan requirements contact us today on 0117 313 6058.