In recent times, bridging loans have exploded in popularity as a short-term funding option. This kind of loan application is typically filled by an individual, who wants a sum of money to cover an interval between two massive transactions, usually selling off an old asset to buy a new property.
Why You Will Need It?
As the family grows- from a loving couple to sweet little children roaming here and there, the requirement of square feet also gets augmented. Now, your 1-BHK apartments seem like a constrained cave, where the early man lived. Is that painting a true copy of your current scenario? However, in the global situation of economic recession, real estate market has an ever-rising uncanny ability of price rise, even when they are no end-users fishing around. The prices of residence dwellings increase or remain stubborn, irrespective of the economic scenario of a nation. Fortunately, you stumble upon an apartment going cheap that somewhat in line with your tight budget without comprising on the several aspects of your potential new residence. Unluckily, you need to sell off your current accommodation, which indeed a baffling task, keep in mind there are virtually no genuine end-users in the real market.
So, what to do now? Probably you can’t leverage the seller to wait for some time. Since he is having an urgent monetary requirement, the reason he might be selling the property at a below par rate. Don’t feel low, or call your friend, relative, or someone close to cash, as now arrange a bridging loan is the best way to solve the above problem of many families.
Benefits of arranging a Bridging Loan
The biggest perk of getting into such kind of short-term loan is probably never a burden of your shoulder for long. Unlike, a home mortgage loan, which can be repaid over a course of 15 to 20 years, bridging loan is between 2 months to 3-year duration. The longer the loan repayment duration, the greater the odds are, you’ll run into financial problems. So, as a piece of advice, decide on the term of your bridging loan, keeping in mind your earnings and savings. Taking this loan helps you to give the above problem a miss, furthermore, bridging loan is not any prepayment penalties’ associated with it. And, when a borrower, repays the gleaned loan in a single installment, or before time, it reflects well in your credit score. This in future will help you to get a loan for your new sedan, or a home renovation project.
The monetary obtained from this loan can be employed as a down payment for your new apartment. This, therefore, simplifies and speeds up the process into moving into the property. Not to mention, there is no need to repay the loan immediately. You can wait for a couple of months, before starting a schedule or do a one-time payment.
Wrapping up, arrange a bridging loan can be done by visiting your bank, searching the internet, or ask your friends to make sure to hit the lowest interest rate going around.