What Are Risks Associated With Lending?

Falling into arrears

Missed payments will result in further fees and charges from your lender:

Standard arrears Fees
Increasing Missed Payment Fees
Monthly Fixed Arrear Charge

Lenders can take you to court if agreed payment terms are not met and they have to chase you or a cheque payment you make is returned unpaid.

Top Tip:
If you are having difficulty meeting payments, contact Rapid Bridging Ltd immediately. We know all the options available to you and may be able to simply extend the bridging loan (note that this will incur extra fees and interest).

Failure of exit strategy

By understanding bridging loan risks, you’ll better equipped to evaluate your exit strategy and plan to mitigate loan risk as much as possible. Breaching the loan agreement by failing to repay the bridging loan or interest on time or by letting the property without consent, for example, may result in your property being repossessed.

An eviction order can be obtained, meaning you would have to vacate the property. It can then be sold to redeem the outstanding debt and any additional costs and charges your lender may apply.

If the funds raised exceed this, the remainder would be due to you. However, if the funds raised do not cover your debt, you will be subject to legal action to pursue the debt from any other assets you may own. Any asset can be seized and sold to repay the bridging loan, including real estate.

If seized real estate can’t be sold within acceptable timescales due to a slump in the market, for example, your lender may appoint a Law of Property Act (LPA) Receiver to manage the property on their behalf. Any income from this will go to the Lender.

Top Tip:
At Rapid Bridging Ltd, we have a wealth of experience and always act in your best interests. We know all the potential pitfalls and will do our utmost to protect you.

Risks Associated with Lending

Understanding bridging loan risks

Falling into arrears

Failure of exit strategy

Contact us for more information