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Misleading Advertising Undermines Bridging Professionalism

Some bridging lenders are deliberately luring borrowers into low monthly interest rate loans that end up costing thousands of pounds more than they anticipated once fees are slapped on top, claims bridging loan firm Fincorp.

Nigel Alexander, director at Fincorp, says he fears the increasingly competitive market for bridging is "pushing lenders to compete more desperately" with lenders claiming they'll offer rates "from" lower and lower levels, but they can't and don't deliver in reality.

Alexander says: "We are increasingly concerned that brokers are being seduced by headline rates that are simply there for show. Most lenders aren't actually agreeing deals at the rates they're advertising but brokers and clients are being drawn in. The problem, in our view, is that some of these lenders then agree terms that are too short to be appropriate for the deal, clients default on the original terms and then they're left facing penal rates of interest, default fees, and extension fees - often up to 2% a month, and in some cases backdated to the start of the loan. This is bad for consumers and should be a cause for concern."

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