Can A Bridge Loan Help?

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If you are in need of cash urgently you can use your property and assets to secure a loan. One of the loans you can apply for is a bridging loan. Bridging loans are short-term loans used to bridging the gap between two forms of financing.

They are usually used to bridge the gap between selling and purchasing a property. The property being purchased can be anything from non-commercial, commercial and even residential property. These loans are used to purchase a property until the borrowers assets can be turned into hard cash.

The amount you can lend with a bridging loan does depend on the value of their collateral that they provide their credit status and income. Most bridging loan providers will be happy to lend between $50,000 and $500,000. These loans are only short term so the repayment period is usually between 1 week and a year, so they are not just a spare of the moment loan they need to be thought through and looked into in detail.

If you find a bridging loan is the right loan for you, you can apply online and have the money in your account within hours. You will need to fill out and submit a form containing all your details such as your name address phone number ect.

Even if you have a bad credit history with things such as bankruptcy you can still apply for a bridging loan, everyone is taken into consideration as long as you have collateral to give. They will be able to take their money back using your collateral if you don’t make payments.

There are two types of bridging loans that are offered by bridging loan lenders. Those are open and closed bridging loans, below I will explain the difference between the two.

Open Bridging Loans – Open bridging loans are used when I person wants to purchase a property but their current home of property hasn’t yet sold so they are still looking for a buyer. This means the lending company are unsure of when they will be paid back, which is more risky and therefore incurs more costs.

Close Bridging Loans – A closed bridging loan is the opposite of an open bridging loan, these loans are offered when a person has sold their home or property and are just waiting for paperwork and payment to be. This means the lending company will have an idea of when they will receive payment; this makes things easier for them, which means the interest added on to your payments will be smaller.

The interest rates usually charged on top of your repayments for a bridging loan is usually around 15%. These repayments are expensive but are what the companies have to charge to make any money.

If you are thinking about applying for a bridging loan take your time and really think about it. They are not something you should just jump into. You can have a loo online for more information regarding bridging loans or speak to an advisor who will point you in the right direction.

 

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