How Long Does it Take to Get a Bridging Loan?
It may take anywhere between 24 hours and four weeks to get a bridging loan. Read on to find out what affects your application and how to avoid delays.
Bridging loans are a short-term loan that could help you purchase a commercial or residential property. Find out how long it takes to get a bridging loan and how to avoid delays in the application process.
The amount of time it takes to get a bridging loan varies between lenders and will depend on your individual circumstances. While it is not unusual for bridging loan providers to approve applications within 24 hours, it generally can take between two and four weeks for a bridging loan to get paid out once an application is approved.
» MORE: What is a bridging loan?
What factors can delay a bridging loan application?
There are a few factors that can slow down the bridging loan application process, including:
- The type of bridging loan: Each lender has its own bridging loan application process. Some providers are more rigorous than others. Lenders offering residential bridging loans, which are regulated by the Financial Conduct Authority (FCA) typically take longer to process than unregulated commercial bridging loans. That is because unregulated bridging loans tend to have fewer checks during the application process.
- Property survey/valuation: Lenders will usually require a property survey to be carried out, which can slow down the application process. Although this step may cause delays, it can help to ensure that a fair price is paid for the property.
- Negotiations: It may take longer to negotiate a bridging loan deal, especially for larger and more complex credit agreements. Often bridging loan brokers will need to compare the whole of the market to ensure that they negotiate the best offer with a suitable lender on your behalf.
- Exit strategy problems: It’s important to have a clear exit strategy when applying for a bridging loan. This ensures that a lender knows how you plan on repaying the loan. Any issues with your exit strategy may delay your bridging loan application or result in it being rejected.
- Documentation delays: Any delays in sending the necessary documents for your bridging loan application may slow down the process. It’s essential to have all of your documents ready to go and send them off to your lender promptly.
How can I speed up my bridging loan application?
While the time it takes to process a bridging loan application varies between lenders, there are ways to reduce the risk of delays, including:
- Having all of your documents ready and prepared to send to the lender will help ensure that your application goes through as quickly as possible.
- Choosing an experienced solicitor could also help reduce delays in the bridging loan application process. When comparing solicitors, it helps to ask for examples of their history with securing similar forms of finance for other clients. It’s also worth checking their workload and whether they can complete your application quickly.
WARNING: Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.
Always check whether a bridging loan is regulated or not. To protect consumers, bridging loans on residential properties must be regulated by the Financial Conduct Authority. Bridging loans on buy-to-let, commercial and investment properties can be unregulated.
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Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more