Bridging Loan - Complete Guide

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Common Types of Loans
People sometimes wonder about common types of loans, especially with all of the different types of loans available.

There are many common types of loans that may fall into the same categories, as well as some common types of loans that are only different in one or two small ways.

Below are the descriptions for several common types of loans, including some of the factors that ... Read loans article



How to Apply for a Personal or Business Loan
The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize the... Read loans article



Bridging Loan - Complete Guide
How many times have you been casually going about your business, seen a great property and thought, "that would be a really nice place to live"? Then you snap out of it, knowing you can't lay your hands on the money fast enough. Well what if you really wanted this property? You discussed it with the agent, your emotions got the better of you and you made an offer.

This has to be a fast sale or the vendor will sell it to someone else, what will you do? How will you find the cash at such short notice? Unless you happen to have thousands of pounds lying around in some bank account you forgot about, you're going to have to borrow some money and fast!

Did you expect the financial industry NOT to have a product for people just like you? Of course not. They've thought of everything. The answer is a bridging loan!

A bridging loan provides a temporary window. As is suggested by the name, it bridges the gap between the amount of cash you need now and the amount you currently have. What you earn normally has no bearing on the matter. How much your current property makes on open market again does not come into it. Your bridging loan takes care of your what you need right now.

If you apply for a bridging loan you can buy the property immediately. You will pay it back when you sell your current property. So, you see, you can have the best of both worlds. Just make sure you read the small print. Make sure you're not being charged extortionate amounts of interest. I always make a point of reading the small print, no matter how long it takes.

Usually, a bridging loan will be a short-term loan with a repayment cycle of one week to six months. There should always be a clause allowing the customer to repay the full amount as soon as their current property is sold.

More often than not, a bridging loan uses the customers current property as security. As the customer, you have options. You will generally have the option of securing the loan on both properties or either one of them. This gives you a little flexibility.

These guys usually move fast. The brokers' valuer will assess the property and come up with a figure on which your bridging loan will be based. This figure will depend on many factors. At the top of the list, you'll find the usual suspects: location, number of bedrooms, size and the general condition of the place, to name but a few.

As soon as the valuation is complete, the lender is in a position to advance the cash to the customer. If you choose a good broker this will happen fast. As a rough rule of thumb, expect to be able to borrow up to 65% of the value of the property. Lenders offer as much as £25000 to some million pounds on a bridging loan.

Where's the best place to get a bridging loan? Ask your financial advisor and look around, especially on the internet. More and more lenders are coming online these days and there are always some really great deals to be had as lenders try to "out-offer" each other. Get quotes from as many different lenders as you can. Draw up a quick rate comparison sheet to help you decide. You will find that there are many different fee levels for this kind of loan. Sometimes it may be better to pay a little more if the terms are more favourable. Again, always read the small print.

One of the main deciding factors for you will be the speed at which the cash will be forthcoming.Always make this the most important factor in your decision. No point going through all this to be pipped at the post because you were waiting for the money. The whole reason to get a bridging loan is to get instant cash. Choose a lender who specifically states how fast they deliver after signing. You will find many lenders are less than acceptable on this point.

So, a bridging loan can help you out in a tight squeeze. However, there are always two sides to the coin.

Bridging loans are perceived as "higher risk" by most lenders. Interest rates are generally higher because of this and you may find that the one-off charges are also higher than with a conventional loan. Usually because this is the customers' only option and the term is short, the rates will be accepted. The best way to approach a bridging loan is to keep the term short thereby minimising costs.

A further risk when using a bridging loan is counting on your existing property being sold quickly. Should the market drag for you, you will end up paying lots of interest on your bridging loan. This will be your situation until your home is sold.

To conclude, a bridging loan may seem like a great way out and used correctly, it often is. However it is not without it's risks. The risks are very real and deciding to take out a bridging loan should be a measured decision. For these reasons, it's highly recommended that you talk to a good independent financial advisor.

Fabio Marcell is a seasoned contributor to many online and offline journals specialising in the financial sector. He has many years experience in the loans industry and is currently sponsoring the following website: http://www.a1-low-interest-loans.info (for web reprints please ensure this URL is hyperlinked) (c) 2005 Fabio Marcell - All Rights Reserved

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No Credit Motorcycle Loan

It is no secret that thin or no credit can hurt just like bad credit when shopping for motorcycle loans. The main reason for this is that lenders all have a variety of strategies on how to approach motorcycle loans in their loan portfolios. Some lenders see motorcycles loans as a risky but feasible business investment, while other lenders label motorcycles loans as a high risk money losing investment. Overall, the general perception of most lenders is that a motorcycle is a "toy" and therefore motorcycle loans are much more risky than other types of loans. This "toy" labeled perception from lenders is a critical component which makes shopping for a motorcycle loan much more difficult for motorcycle buyers with thin or no credit.

If you would like to get approved for limited or no credit motorcycle loans, the first step is to look online. Many online lenders are very competitive with offering motorcycle loans and some of them specialize in limited or no credit motorcycle loans.

If you have searched online and are still having trouble getting approved due to thin or no credit, it is critical that you begin to understand the impact of your FICO credit score. Essentially, a FICO credit score is the number one variable most lenders use in approving you for a motorcycle loan. The FICO credit score is a computer generated score which is comprised of your credit payment history, amount owed, length of credit, amount of new credit and types of credit.

Since many people with thin or no credit do not even have a FICO credit score associated with their credit file their motorcycle loan applications are sometimes automatically declined by lenders. Therefore, the first step to getting approved for a limited or no credit motorcycle loan is to start building credit history. In order to get a computer generated FICO credit score with your credit file you must have at least one credit account that has been open for at least 6 months and has been updated at least once in the previous 6 months.

This requirement can make it tough for young motorcycle buyers or immigrants who wish to establish a credit score since some lenders will not extend credit to people with a thin file. However in today's age, there are credit card companies willing to give newcomers a credit card with a small $500 limit to get started.

As a result, if all else has failed and you have limited or no credit a great way for you to begin building your FICO credit score is to get a low credit limit credit card and begin using it regularly for small everyday purchases. The key to this strategy is keeping your purchases small and frequent and paying off the balance every month on time. Always try to avoid maxing out the credit cards or even using more than 30% of the available credit limit. To make this easy some small purchases can even become automatic by putting things like monthly cable or telephone bills on automatic credit card payment.

The bottom-line is that finding a limited or no credit motorcycle loan can be challenging, but working smarter by shopping for a motorcycle loan online and also beginning to build a credit history can take a lot of pain out of the process.

About The Author: Jay Fran is a successful author for a website that specializes in finding the best low interest rate online motorcycle loans, including used motorcycle loans.

Copyright (c) 2005, by Jay Fran. This article may be freely distributed as long as the copyright, author's information, and at least one of the above active live links with anchored text are published with the article.


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Bridging Loan - Complete Guide
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