Ensuring you understand all of the costs associated with bridging finance before applying is essential. The best way to build a clear picture of bridging loan costs is to consult with an established broker who will also help you find the most cost-effective product for your needs.
Alternatively, there are bridging finance cost calculation tools available online which can give you an instant idea of basic borrowing costs.
Using An Online Bridging Loan Calculator
Bridging finance calculators are designed to offer a quick and convenient summary of the costs associated with bridging loans. The mechanics of most online bridging loan calculators are fairly similar, which provide business rates and estimates of borrowing costs on the basis of the information submitted.
You will be asked to enter the amount of money you intend to borrow, your preferred repayment period length, and the approximate interest rate at the time. You will then be returned with a summary of the overall borrowing costs, with the option of adjusting the repayment term and loan amount to correspond with your requirements.
It’s important to note that the figures returned when using an online bridging loan calculator are simply non-binding estimates. In addition, the calculation is based entirely on the information you submit, so you need to ensure the data you enter is as accurate as possible.
If you would prefer to repay the balance on your loan interest over a longer period of time, a mortgage calculator could prove invaluable. This is a facility that works in largely the same way as the bridging loan calculator, with slightly different data entry requirements.
With a mortgage calculator, you will be asked to enter the amount you wish to borrow, along with the size of the deposit you are able to pay and your preferred repayment period. With a mortgage calculator, you are able to specify repayment periods of anything from five to 35 years depending on the provider.
There is the option of adjusting the data you enter to find which option best suits your requirements and budget.
While some standard mortgage calculators can be used to calculate bridging loan rates, others cannot perform calculations without entering a deposit amount or a repayment period in excess of two years. In which case, they are unable to provide an accurate indication of monthly repayments on a bridging loan.
Independent Broker Support
Most loan or mortgage calculators work on the assumption that the applicant is in a generally strong financial position and has a good credit score. As there are countless factors that can influence the affordability of a bridging loan, independent broker support is essential.
Your broker will help you choose the most appropriate facility to suit your requirements while negotiating on your behalf to get you an unbeatable deal. They will also be able to provide you with a more accurate indication of the borrowing costs you can expect if you choose to go ahead with your bridging loan application.