Skip to content. | Skip to navigation

Personal tools
You are here: Home Focus Getting the Lowest Rate on a Bridging Loan

Getting the Lowest Rate on a Bridging Loan

Bridging loans typically attach exceptionally competitive rates of interest. When considered in context, rates as low as 0.5% on loans typically offered over a period of six months or so are borderline unbeatable. Especially when combined with modest administration fees and the convenience of accessing the money you need just days after submitting your application.

Getting the Lowest Rate on a Bridging Loan

However, this doesn't mean that all bridging loans offer the same value for money. Prior to submitting a bridging loan application, it's important to consider whether you're getting a good deal.

But what can you do to keep interest rates and borrowing costs to absolute minimums?

Whatever type of bridging finance you need, getting the lowest possible rate on a bridging loan means following these expert guidelines:

1. Use an online bridging loans calculator

First and foremost, it's worth using an online bridging loans calculator to explore the available options. More often than not, repaying a bridging loan as quickly as possible is the best way to minimise overall borrowing costs. The APR attached to a longer-term loan will always be lower, but will also amount to a more expensive loan over time. Use a bridging loan calculator to see how much better of you could be, if you were to repay the loan sooner, rather than later.

2. Compare the best deals for bridging loans

When you know how much you need, it's time to compare the best deals for bridging loans from as many lenders as possible. This can be simplified significantly by working with an independent broker. Take your case to someone who knows all about bridging finance - a broker with access to an extensive network of specialist lenders. Let them match your requirements with your perfect bridging loan and generally oversee the application process from start to finish.

3. Demonstrate a strong exit strategy

Along with the collateral needed to secure the loan, bridging finance specialists are primarily interested in their clients' exit strategies. This means the extent to which the applicant can clearly demonstrate their capacity to repay the balance of the loan in full and on time, usually on a predetermined date. While it's possible to apply for a bridging loan with no exit strategy whatsoever, it can be more difficult to qualify. Likewise, you will almost always find that strong evidence of a viable exit strategy opens the door to the best possible bridging loan rates.

4. Consider your credit history

Imperfect credit is unlikely to prevent you from accessing a competitive bridging loan. However, an exceptional credit history only stands to benefit your application. It's rare for applicants to be excluded purely on the basis of their credit score, but this doesn't mean an excellent credit score isn't beneficial. There isn't a great deal you can do to improve your credit score over the short-term, but it's nonetheless worth considering for future applications.

5. Evidence of experience and expertise

Industry experience is by no means a prerequisite for accessing bridging finance. Nevertheless, some bridging loan providers consider both the nature of the project and expertise of the applicant, when calculating interest rates and borrowing costs accordingly. As with your credit history, this doesn't mean that a lack of provable expertise will stand in your way. Nevertheless, if you can demonstrate to the lender that you know exactly what you're doing and have an established track record, you could gain access to an even better deal.

6. Offer higher-value collateral

Last but not least, assets used to secure these kinds of loans lower the 'risk' of the transaction for the lender. The more collateral you're able to provide to cover the cost of the loan, the lower the risk accordingly. If you're willing to use higher-value assets as collateral (wherein the total value comfortably exceeds that of the loan), you could be offered a more competitive deal. Speak to your broker to discuss the available options. –

Document Actions
EU Alerts

EUbusiness Week no. 851
Time to speed up climate action
→ EUbusiness Week archive

The Week Ahead no. 457
EU summit - climate change - long-term EU budget - Brexit - European Green Deal

Subscription options