Bridging Loans with Bad Credit
Generally speaking, lenders will require you to have a good credit profile when considering your application for a bridging loan. Having a good credit profile will put you in the best position to secure the most competitive rates that are available.
If you have a bad credit profile and try to get a bridging loan, it does not instantly mean that you cannot secure a bridging loan. The most likely outcome to this situation will be that you will end up paying higher rates than if you had a good credit profile.
Are bridging loans available with poor credit
Bridging loans can be available to you if you have a poor credit rating. When assessing your application, lenders will look at more than just your credit score. They will usually take into account the size of your deposit and the assets you are willing to secure against the bridging loan, just to name a few.
Acquiring a bridging loan can be a complicated process, couple that with poor credit and it can make matters even more complicated. In order to secure a bridging loan with poor credit it is advisable that you speak to an experienced broker who can have a look at your individual circumstance and present your case to a potential lender in the best possible light.
Can you get a bridging loan with bad credit
If you have bad credit then you can be forgiven for thinking that a lender will not offer you a bridging loan. This is actually a misunderstanding. While some lenders will shy away from lending you any money if you have bad credit, other lenders will be more than willing to take their place and offer you the bridging finance you require.
Bridging loans are a specialist area of finance which is widely misunderstood by the majority of people. It is important to get the correct professional advice before trying to secure a bridging loan. The wrong advice or product could cost you thousands of pounds more than is necessary.
How to get a bridging loan with bad credit
Trying to get a bridging loan can seem daunting, especially if you also have bad credit. In order to secure a bridging loan with bad credit it is highly recommended that you speak to an experienced broker. It is important that while dealing with a broker that you are clear from the outset on your objectives. Also vitally important is that you do not withhold any information that the broker requests. The more information the broker has the more in depth and detailed their research will be.
Once a broker has completed their research they will be in a position to carry out an up to credit search on behalf of the potential lender and also present the potential rates that may be available to you. If the lender is happy with the case that is presented to them, including the credit search then you will be in a position to make a full application to the lender via the broker. After the full application is made, the lender will instruct a Surveyor to look at the property or properties you are using as security against the bridging loan. The Surveyor will then report back to the lender to confirm if the property or properties are suitable security. The lender will then assess your application with all the facts that are available and then hopefully make a formal offer.
Once you have a formal offer it is then down to your solicitor to get the money released and transferred into your bank account or sent onto an onward vendor or seller. The process to get a bridging loan with bad credit can be complicated but we will endeavour to try and make the process as easy as possible for you.
What type of credit issues will bridging lenders accept
Bridging lenders will always make a risk assessment on your profile and potential project before offering you a rate of lending. If you have had credit issues in the past then a lender will perceive you as a slightly higher risk than someone who has a perfect credit history. In traditional lending, lenders can have very rigid criteria with the types of credit issues they are willing to accept. Bridging loans are different as lenders will take a risk assessment approach and increase your rate based on the perceived risk.
Bridging lenders are willing to consider applications from people that have the following credit issues and more:
- Discharged Bankrupts
- County Court Judgments (CCJ)
- Debt Management Plans (DMP)
- Individual Voluntary Arrangements (IVA)
- Missed mortgage payments
- Missed unsecured payments
- Low or no credit history
The only caveat to the above is if any of the above affects the exit strategy of repaying the bridging loan.
Our brokers are well placed to not only asses your eligibility for a bridging loan but also make an assessment on whether they can also secure you a credible exit strategy, especially if the exit strategy requires you to borrow funds from another lender.
Can I get a bridging loan with no credit check
The short answer to this question is no. Lenders will carry out a credit check before committing to lending any bridging loans to you.
Bridging loan applications are assessed on a perceived risk to the lender, part of which is your credit profile. While lenders will generally not take a ‘credit score’ based ‘computer says no’ approach, they will take into account your credit profile when deciding whether to lend to you or not and the rates they are willing to offer you.
Can I get a bridging loan with a low credit score
It is definitely possible to get a bridging loan with a low credit score. If you have a low credit score rather than a poor credit score then it can be seen as you not having much financial experience. Lenders will take this factor into account when making an assessment and also when offering you a bridging loan rate.
Bridging loans are usually assessed via a manual underwriting process which means that lenders will also look at any other relevant experience you have, your plans for the bridging funds along with your exit strategy.
A low credit score will not rule you out from acquiring a bridging loan. Our expert advisers can answer any questions upfront and help you find the most appropriate bridging loan lender for your individual circumstance.
Bridging loan advice if I have bad credit
If you require a bridging loan and have bad credit then there are a few things you can do that can help towards securing a loan approval from a lender. These are as follows.
- A good size deposit will help as the risk exposure to the lender is reduced
- An exit strategy that is both viable and achievable
- Demonstrating experience in previous property development projects
- If your bridging loan is for a property development project then a good project plan will also help
- If your bridging loan is for commercial purposes then a solid business plan will be helpful
When trying to acquire a bridging loan it is important that your case is packaged and presented to the lender in the best possible light. It is therefore important to seek the help of a professional adviser who will not only package your case but also deal with any subsequent queries from the lender in the most appropriate manner.
Speak to us at Just Mortgage Brokers today to see how we can help.