Are you looking for a way to finance your next project?
Bridging loan are becoming increasingly popular in Australia for borrowers who need to access capital quickly. They are also useful if you need to borrow money only in the short term. Whether it’s for a temporary cash injection or buying a new home before selling your current one, a bridging loan can help.
Here are five reasons to consider a bridging loan:
1. Flexibility
Bridging loan are renowned for being flexible, so you can structure the loan to suit your specific needs and repayments schedule. This flexibility can be particularly helpful for borrowers who are unsure about their long-term plans or who need financing for a short-term project.
2. Speed
Bridging loan are usually approved quickly, which is ideal if you need funding for a project that needs to be completed very soon. You don’t have to wait that long before the money is wired to your account. If you need to settle a property transaction quickly and don’t have time to wait around for traditional finance to come through, a bridging loan could be worth considering.
3. Competitive rates
Bridging loan are an attractive option for borrowers seeking funds for personal or business use because they usually have competitive interest rates. However, it is important to compare different offers before deciding on a particular loan, as the terms and conditions can vary significantly from one lender to another.
4. Access to Equity
Bridging loan can provide access to the equity in your home that may not be accessible with other types of financing. This can be especially helpful if you’re looking to buy another property, and making renovations to your current home can be a great way to increase its value.
5. Broad use of funds
Bridging loan can be used to fund a variety of requirements, such as:
Buy a property before your current one sells
Bridging loan are often acquired by borrowers seeking to buy a property before their current one sells. The essence of ‘bridging the gap’ between two financial transactions is very much applicable here. It can provide you with the funds you need to purchase the new property, while still giving you time to sell your current home.
Finance renovations or repairs on a property
Increasingly, bridging loan are utilised for renovations or repairs on a property prior to sale (and then paid off once the work has been completed and the property has been sold). By taking out a loan and using the equity in your home as collateral, you can free up the cash you need to make the changes you want.
Consolidate debt
Many borrowers utilise a bridging loan to save money by consolidating multiple debts with high-interest rates into a centralised, lower-interest facility. If you have multiple debts with different interest rates, consolidating those debts into one loan with a lower interest rate can save you money on your overall interest payments. This is because you’re only paying the interest on one loan rather than multiple loans.
Business purposes
If you need capital for your business, a bridging loan can help you access the funds quickly – with approvals often occurring within 24 hours, and funding released within a few days.
Key takeaway
A bridging loan is a flexible type of funding that can be tailored to your specific needs. Bridging loan can be used for personal or business use. Your finance broker can help you obtain the most suitable loan for your needs. They have the knowledge and experience to find the best lenders for your needs. Also, they can negotiate on your behalf to get you the best terms and rates possible.
