Choosing the best product for your needs is essential when securing a loan against your property because it’s a major choice. Having bridging loans in your toolbox is a great idea, but make sure to only use them when necessary.
The alternatives to bridging loans are:
- Secured loans – a secured loan is ideal for when you want to raise funds on a second charge loan. They are loans secured against property and usually come with lower interest rates than bridging, although your maximum available borrowing may be restricted by how much equity you have in your property.
- Property development finance – for property developers
- Commercial mortgages – for commercial properties, can be offered with fixed or variable rates.
- Using savings or a family loan (essentially borrow money from family). While this may be fine for a smaller purchase, such as buying cars or repaying credit cards, it is often less so for funding large purchases such as a residential or commercial property.
- Personal loan – these can be used to raise smaller amounts but aren’t suitable when looking to borrow larger sums of money from lenders (or even much over a maximum of £20k). Personal loans usually have little to no lender arrangement fees.
