If you have short term loan requirements for buying a home while you are waiting for the completion of a long term funding, a bridging loan is the ideal option for you. As the name implies, this loan is meant to bridge a gap between your financial requirements and getting long term loans sanctioned. It can also be used to bridge a gap between buying a new home and selling an old home. In UK, these loans are extremely popular, and there are many people that obtain them for buying residential or commercial properties. There are of course some significant advantages of these loans for which they are immensely popular.
Buy Your New Home Before Mortgage Approval:
With bridging loans, it is possible to buy your dream home much before the approval of your mortgage. Once your mortgage is approved or your old home is sold, you can repay the loan amount. Consequently, you can be assured that you will not have to worry of your dream home getting sold to someone else due to lack of your financial arrangements. There are so many lenders ranging from traditional banks to individual lenders that offer these loans due to which the availability will never be a problem.
Secured Short Term Loan:
Though the bridging loans are meant for short term, these are secured loans. Your home or property is used as collateral for security. The lender might often use your equity as security. Based on the security used, the rate of interest might vary from one lender to another. Thus, it is important to check out with each lender so that you are successful in getting a good deal. In addition to that, you should also check out the terms and conditions. Once the agreement is finalised, you can get your loan within few hours so that you can utilise it for your purpose.
Used In Businesses:
Apart from residential uses, bridging loans are also used in businesses. Of you want to convert your business idea into sales at the earliest, these can be the ideal funding source for you. In such a case, the assets of your business can be used as security. Consequently, you can not only start selling your concept immediately to generate sales, but also to capture the market share in this field of competition. It can even help you save time to look for other financing option when you are in need of money.
Flexibility In Repayment Options:
The best thing that you would like about repayment loans is the flexibility to choose from diverse repayment option. You can choose to repay the loan amount before the permanent financing is secure. Otherwise, you can even think of paying later. In fact, the entire payment procedure is structured in such a way so that you are successful in repaying the loan within the limited time span. If you can repay the money on time, it will create a good impact on your credit rating, and you can qualify for long term loans easily.