From Adviser Guide:
Short-term finance 1hr
Q: Do missed payments affect credit rating?
In certain circumstances the borrower’s credit rating can be hit by failure to pay off a short-term loan.
If a bridging loan goes into default a customer’s credit rating will be affected if their lender is a contributor to a Credit Reference Agency, according to Alan Margolis, head of bridging at United Trust Bank.
If the client does not pay-off a personal asset loan, Paul Aitken, chief executive of Borro, said their credit rating is not affected and there will be no bad debt.
Mr Aitken said: “As the loan is secured against the asset, should there be a surplus if the asset goes to sale; the surplus goes back to the client.
“Should there be a deficit, if would be our responsibility.”
Finished reading all the other articles in this Guide? Bank 1hr of Structured CPD
More in this guide
- Q: What is short term finance?
- Q: What are the different types of short-term loan?
- Q: What are the pros and cons of different short term loans?
- Q: Who regulates short-term loans?
- Q: How are short-term asset loans secured?
- Q: What happens if the borrower misses a payment?
- Q: Is the bridging loan borrower protected by law?
- Q: Once a bridging loan is agreed can it be cancelled?
- Q: What will I be paid for arranging short term finance?
- Q: Can the asset be sold?
- Q: What if the asset is sold for more than the loan amount?