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Bridging Loans
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Bridging loans are loans which help the borrowers get instant cash for purposes like buying home or investing in business. |
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People are frequently stuck up in a catch 22 situation. They maintain minimum liquidity and make investments in real estate. This becomes disadvantageous at times when they need liquidity to accept a particular offer for home, but are not able to because it is not easy to convert the real estate into cash instantly.
Bridging loans provide immense help in these situations. The bridging loans can be approved in a lesser time than required by the other loans. The idea behind the
instant approval of bridging loans is to enable borrowers to have cash immediately. As soon as the cash on the bridging loan is received, the borrower can buy the house. Bridging loans are short-term loans with the repayment term kept short intentionally in order to save on the interest rate. The rate of interest is generally higher in case of bridging loans. However, at Loans4UK, we make an endeavour to find the best of rates on bridging loans.
The new home or the older home or both homes combined serve as collateral for the bridging loans. The term of repayment is one week, to about six months.
Bridging loans can become isadvantageous in case there is delay in selling the former property. Only when the old property is sold can the borrower pay off the bridging loan. Bridging loans become more of a burden because of the high interest charges accruing upon them. Other financial products being offered at Loans4UK are and . |
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