The Two Types of Bridging Loans and a Comparison
Bridging loans are a particular kind of financial product, which can be used by individuals or businesses to obtain a short-term loan. Most of the
Bridging loans are a particular kind of financial product, which can be used by individuals or businesses to obtain a short-term loan. Most of the renowned lenders from UK offer this loan. Several times, it happens that an individual is refused a loan on the grounds of poor credit record arrears etc. They find the high street financiers unwilling to provide financial assistance to them. This is why they need to turn to secondary loan options such as bridging loans.
Full Status and Non-Status Lending
Upon what condition will a bridging loan be offered and who will be eligible to obtain the loan would strictly depend upon the lenders. Depending upon the process followed by the lender while offering the loan, bridging finance is divided into two types, full status lending and non-status lending. The first type refers to the process when the borrower would need to have a good credit score. However, a non-status lending would mean that even an individual with an adverse credit report becomes eligible for a bridging finance.
A Comparison between the Two Types
It is an obvious fact that non-status lending form is much more popular than full status lending. Why? If an individual or a business had been an A-class credit rate holder, he would have just consulted hi bank in order to obtain a short-term finance. Secondary finances prove useful for those with meager credit past, arrears, CCJS etc. Only when an individual is denied a loan from any of the conventional financial institutions, will he turn to the secondary loans. A bridging finance can help you to renovate your property; pay off sudden tax bills; buying property in an auction; improving your home conditions; to meet short-term cash flow issues. Diverse are the uses of a bridging finance. It has also proved its worth as a fast home loan.
Therefore, be it a need to renovate or extend your house or make arrangements for an occasion, a bridging finance can be of extreme help. In situations when an unwanted payment crops up from nowhere, a bridging finance will cater to the user’s needs and help them to get it sufficed. However the very essential fact is that you would have to understand a bridging finance very well before you decide to avail the facility. Your information would make sure that you do not make a wrong decision for which you would have to repent later.