A short term bridging loan can be used by a wide variety of borrowers and the market for them has grown hugely in recent years.
They are particularly popular with borrowers wanting to buy a property quickly so they can secure their dream home while in the process of selling their current property; this sees the loan providing a ‘bridge’ between buying something and then having the money to pay for it.
Some vendors, for instance, may set a deadline for exchanging contracts which means those wanting to buy will need to access funding quickly.
Short term bridge loans are also popular with those buying at auction, to those who are looking to own a property for a short time by renovating it and then selling it on to make a profit.
Why bridging loan funding is growing in popularity
That’s another reason why bridging loan funding is growing in popularity since the loans can be organised more quickly than for a traditional high street lender, for instance, and borrowers can borrow large amounts in just a few days.
It should also be appreciated that for the convenience and flexibility of accessing large amounts of money quickly means this type of borrowing tends to be more expensive as well with interest charged on a monthly basis.
In addition, some lenders will also have an administration fee and a bridging loan broker may also charge for their services.
However, it’s also possible for the fees and interest payments to be ‘rolled up’ so the borrower does not make any monthly repayments whatsoever but simply repays the whole amount when the loan falls due.
Wide variety of loans and bridging loan rates on offer
It should also be appreciated that with the rising popularity of bridging loans, the number of providers is also growing so there are a wide variety of loans and bridging loan rates on offer.
These lenders are not just targeted at those buying property but also enable a business, for instance, to buy stock for an upcoming promotion or to renovate their business premises.
Essentially, a bridging loan is a great way for someone who needs to access a large amount of money quickly and to do so in an efficient way.
Many bridging loan lenders also have a facility on their website for someone interested in short-term financing to find out whether they will meet the lending criteria and how much a bridging loan will cost but for more help and information about a short term bridging loan contact the helpful team at The Bridge Crowd.