If you are looking to buy a residential or a commercial property the deal for which needs to be closed ASAP then nothing beats the convenience of a bridging loan. A regular long term loan may take a lot of time to get approved and this is where bridging loans are so useful. These are usually short term loans that help you get finance when a long term finance option is pending. Some people also call these loans as swing loans or caveat loans.
Bridging loans, as the name tells you act as bridges between your immediate financial need and disbursal of that finance. When you apply for a mortgage loan you usually go to a bank. Banks have their own processes and policies in place and they take their time to approve the loan. Since mortgage loans are long term and high value loans banks have to ensure that they lend to the right borrower. They take time go through all the papers; they take time to inspect and value the property for which you have applied for a mortgage and they also take time go through your financial credibility and credit score. You want to get the money fast because you have a large discount on offer if you pay the money within a stated time. This is the time for you to opt for a bridging loan.
How would you feel if someone offers you a bridging loan where you get the benefits given below?
- The loan amount can be anywhere between £25,000 and £100,000,000.
- The lender can decide to approve your loan within 30 minutes of your application.
- Your payoff tenure is anywhere between 1 month and 18 months.
- You are provided with the terms and conditions within minutes of the approval.
- The money gets credited to your account within 48 hours.
This is like a dream come true for you isn’t it? But most bridging loans are like this. The approval process immediately starts when you apply and you have the money to use in no time. You can use the money for your immediate financial need and when you regular loan application is approved and the money is disbursed you can then pay off this loan.
There is one point to be kept in mind about bridging loans – they attract a higher rate of interest than standard loans. This is why it is always sensible to pay off your bridging loan as soon as you can. The more you delay paying off the loan the more interest you pay. You should use this loan only for bridging your immediate financial need and nothing more. There are many provides of such loans in the UK and it is best to look at them and discuss with your financial advisor before you apply for a loan. Going online also helps.
Getting bridging loans is very easy but you have to ensure that you pay off your bridging loan quickly and efficiently. Only this makes financial sense.