If you are in dire need of money, you may wonder what your options are. You’ve got choices, such as trying to get a credit card, asking money from family or friends, or a bridging loan, which can be the remedy you need for your financial crisis. These loans are usually fast and can be an excellent support net to help you bridge the financial gap you’re in right now.
What They Are
Bridging loans are short-term loans that are borrowed by an individual. They can be used to fulfil commercial and personal problems. You will usually have a predetermined amount that you must pay back and a particular time to do so.
What They Are For
These loans can be used to buy a new commercial or personal property. You cannot use these loans for personal or commercial needs other than buying or selling properties. However, if you’re planning on expanding your company or need a different home, they will work excellently to provide you a little buffer in case of financial hardship. They are so named because they can build a bridge between your financial gap and get you through until you get more funding.
For example, if you are buying a home but must first sell yours, you could end up in a financial crisis. You’ve got to continue paying the bills for the current home but need to have enough money to pay the bills on the new one. These loans can bridge the gap until you have sold the old home and got the new one.
There are primarily two types of bridging loans available, including open and closed versions. The open loan allows you to buy a new property immediately, even if you’re not selling your current one or don’t know when you’re selling it. The closed version gives you more funds to buy the new property whether you have sold the old one or not.
The loan amount will be determined on your collateral and credit scores. Each lender have their own maximum limits, making it a good idea to shop around, especially if you need a larger amount than traditionally average. However, it is also important to understand that these are short-term loans, meaning you won’t have a lot of time to pay them back. Plus, they will have higher interest rates, though you can find some with lower rates.
A bridging loan could be the remedy you’re seeking for your current financial crisis. Visit UCapital now to learn more.