Bridging Loan Calculator
If you need to raise funds to purchase a home faster than a mortgage can be arranged, you may want to consider applying for a bridging loan.
You’ll need to understand how much you can borrow and, just as importantly, how much you’ll be required to pay back. Having this information to hand will ensure you enter into an application with your best chances of approval.
There’s no point chasing an unattainable application that will lead to automatic rejection. Loan Corp has devised a handy bridging loan calculator so you can see how much you need to repay and your chances of being accepted.
This guide will tell you all about our calculator and how it works. You’ll be able to see the net loan amount you must repay and what you’ll need to bolster your application for the very best chances of success.
How is a bridging loan calculated?
To calculate a bridging loan, a lender (and our bridging finance calculator) looks at the total amount of money you wish to borrow.
They also consider the total value of the property, any outstanding mortgage, the size of deposit you can afford and how long you wish to borrow for.
Remember that lenders can use additional calculations like exit fees, your exit strategy and credit history.
Interest rate
When it comes to a bridging loan, the interest rate is usually going to be higher than other types of loan interest.
The reason behind this loan interest is the fast turnaround time for these loans, coupled with these loans being a specific short-term solution over longer-term options with lower interest rates. Therefore, be prepared for your interest payments to be higher.
Legal fees
As well as the interest rate is higher with bridge loans, there are also extra potential fees you should be aware of. These include valuation fees, exit fees, arrangement fees and broker fees.
Loan Corp’s bridging loan calculator
Our bridging loan calculator is specially designed to show you indicative costs for the total amount you must pay back once you are accepted for bridging finance.
As each case is based on its own unique circumstances, the results of our bridging loan calculator are not legally binding.
While our calculator will give you a very good indicator of the total amount you’ll be liable for, you can speak to a member of our friendly and professional team, who will give you a more accurate figure.
When you contact us, within 2 hours we’ll have a better idea of the sum you’ll need to repay in as little as 2 hours.
Bridging loans in Scotland vs. the rest of the UK
There is somewhat of a misconception that bridge loans are calculated differently in Scotland. The bottom line is, they aren’t, but depending on your Scottish postcode, it may make finding a lender more difficult.
If you live in a remote postcode (the Highlands and Islands, for example) there are often restrictions that will affect the types of mortgage products you can get. Thankfully, in recent years, the number of Scottish lenders has grown. This means there’s more competition and better rates than ever before.
At Loan Corp, we can give you a clear indication of your loan availability in all areas of the UK, including Scotland.
If you can’t repay your bridging finance
It’s important that you are able to repay your short-term bridge loan in full by the agreed-upon date. However, it’s also important to note that just about anyone can run into unfavourable financial circumstances, which may leave you stressed and confused about what to do.
If you find yourself having difficulty paying back your net loan amount, don’t ignore it. You will first need to make contact with your lender and explain your current financial difficulties in as much detail as possible. Being open, honest, and completely transparent is the best way to seek a resolution.
Your lender may be able to help and work through different options with you, including potentially giving you longer to pay the loan back. This could, however, lead to more interest being added to your balance.
If there is nothing that can be done, you might want to consider a re-bridge. A re-bridge loan means you can clear the old debt, as well as allow you additional time to pay.
Get your bridge loan accepted in as little as 24 hours with Loan Corp
When you come to Loan Corp, you’ll have instant access to over 100 lenders simply by filling in one application form.
Whether you’ve got near-perfect credit, could-be-improved credit, or not-ideal credit, you’ll fill in the exact same application form as everyone else.
A bridge loan can take anywhere to complete from start to finish. We work with a host of exceptional lenders who can complete a one week turnaround while still giving your application the attention it deserves.
Once you’ve completed our loan calculator, you might find you need your application quicker. We can solve that problem, too. For no extra costs involved, we can ensure you receive an answer to your application within 48 hours.
Simply fill out our bridging loan online form or speak to one of the team today on
0808 301 9509 to get your application up and running in no time.
FAQs
Is bridging finance a good idea?
A bridge loan is a great option if you need funds fast, but coupled with a potentially higher interest rate, it may not be a suitable option for everyone.
How do I qualify for a bridge loan?
The two most important aspects of a bridge loan application are the value of the security property and a solid exit plan. This will detail how the money is to be paid back. However, there are other factors that a lender will look at, such as your credit score, repayment history and income.
What can I use a bridging loan for?
Bridging loans were originally designed to ‘bridge the gap’ between buying a new property and prior to your old one getting sold. However, in today’s world, they are also commonly used for funding development projects and auction purchases.
Are monthly repayments required on a bridging loan?
It’s not a requirement to make a monthly repayment on your loan. However, the option is open to you if you would like to.
How do I calculate what I can borrow?
Generally speaking, you can borrow anything from £10,000 upwards.
Can I get 100% LTV (Loan-to-Value)?
A 100% LTV, otherwise known as a 100% Loan-to-Value bridging loan, will cover the entirety of the value of the property you are purchasing. However, a Loan-to-Value bridging loan is uncommon given its sizable risk to the lender.
How to calculate your minimum loan term?
With a bridging loan, the minimum loan term is usually three months. However, depending on the lender, this duration could be longer or shorter.
How much are broker fees?
Broker’s fees will vary depending on which company you use. At Loan Corp, you are guaranteed some of the most competitive rates on our lender facility fee, so you’ll never be out of pocket when you use our services.
Final thoughts
Bridging loans can be a great option for those that need to arrange a loan fast. With bridging finance, you have the perfect stop-gap between buying a home and your old one selling. It’s also a great option when you make a purchase at an auction, for example.
Using our bridging finance calculator can help you get a feel for bridging loans and a completely transparent view of everything you will need to pay when the time comes.
Remember, however, a bridging loan calculator should be used as a guide only and may not be indicative of the full costs liable to you.
After you have completed our bridging loan calculator, get in touch with us to see how easy we can make the loan process – from start to finish.