Are Bridging Loans Expensive? - For How Long Can We Borrow It?

 Bridging loans tend to have more interest than small business loans, so they can be slightly more expensive than other forms of finance solutions. This happens as they are quicker than other property development loans. Regardless of how you repay, if you have a sound exit strategy, you will be fine. There are so many ways in which people can repay their bridging loans.

• Refinance
• A policy reaching maturity
• Inheritance
• Property or sales assets
• Receipt of money owed

Wondering for how long you can borrow a bridging loan? In the UK, bridging loans, typically, are to be repaid in less than a year, sometimes in just a few weeks. You can avail longer terms too, but it is highly unlikely to find anything over three years. It’s also important to realize that the longer the term, the more interest you’ll have to pay.

Another confusion that people have in their minds is about an unregulated bridging loan.

An unregulated bridging loan sure does sound a bit dodgy, however, it’s just a way of classifying whether the loan is for commercial or residential use. 

Where a regulated bridging loan is used solely for personal residential properties in which you plan to live, an unregulated bridging loan is also used for other business purposes or property investments. They are unregulated due to their complex nature, as they allow greater flexibility and can be customized to meet the needs of borrowers. One important difference worth noticing is that bridging loans offer an additional layer of protection as they are overseen by the Financial Conduct Authority (FCA). So if you are mis-sold a bridging loan or have received bad advice, FCA can intervene.