Default interest rates should be scrapped
Alan Cleary (pictured) is managing director at Precise Mortgages
We believe that now is the right time to back the call for a wider debate on the practice of charging bridging default interest rates. I look forward to a time when default interest is a thing of the past.
Precise Mortgages does not and never has imposed these default interest rates. We treat each and every customer fairly, whether they are a short-term bridging loan customer or a long-term customer.
We support the recent criticism of lenders who charge defaulting customers rates as high as 4% per month or concealing rates by setting a very high standard interest rate which is discounted if payment is made on time.
The bridging sector has come on in leaps and bounds in recent years, with more than £4bn of loans being written in 2018.
However, there are still some lenders who need to take a long hard look at themselves. They’re being lauded by some in the industry whilst still profiting from non-performing customers.
It’s surprising that in 2019 there are still so many lenders who impose these charges and they need to be consigned to the dustbin of history. Practices like this are giving bridging finance a bad name and it’s vital that the industry becomes clearer and more transparent in the way it does business.
We proactively monitor customers’ accounts and don’t wait for problems to arise at the last minute. We’re constantly in contact with them to make sure things are progressing as planned.