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Personal & Bridging Loan

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I currently have a pot of money of around £50k that I want to put towards a flip. The issue is that the sweet spot in my area in terms of likely purchase prices are around £65-70k. This means I won't satisfy the needs of a bridging loan as most are minimum of £50k. Alongside this most in this territory will charge 0.9-1.1% per month.

As I am only in need of around £25k in finance I feel a great option for me would be a personal loan. I could take one out at around 3% per annum interest and pay it all back once I have sold the property. I know this isn't the done thing or what the loans are technically created for but is it illegal to do this? I feel like taking a £25,000 loan out with Sainsburys @ 3% p.a. and then being allowed to overpay/settle whenever I want is the best option over paying £3,000 per annum on a bridging (which I can get on £25,000 anyway).

Many thanks for any help.


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Your personal loan provider will probably ask what you intend to use your loan funds for during the application, and then give you a number of options to choose from. If you say that you'll use the money for one thing, but use it for something else, then you'll be breaking the terms of your loan. Your loan provider could demand immediate repayment of your loan in that circumstance


Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
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