There are many reasons you may need to take out a short-term bridging loans. They are a rather affordable and unique service, no matter who you are and what you need. You may be ready to start off an application, or are still looking into information about it before proceeding. Either way, we’ve put together this article to help you understand the benefits that come with the best bridging loans!
Read on if you want to learn more about short-term bridging loans and how they can help you.
What Are Short-Term Bridging Loans?
Before getting into its perks, it would benefit you to understand just what short-term bridging loans are.
Bridging loans come into use when you need to take a loan (i.e. borrow money) for a short period of time. It is called a short-term bridging loan as it helps you “bridge the gap” that exists in the period where you wish to buy a new property before selling your older one. Bridging loans can also be useful when you want to buy a property during an auction, so you can get the money immediately.
The Types of Bridging Loans: Open vs Closed
Short-term bridging loans are generally characterized into two types: Open, and Closed.
A closed short-term bridging loan is when there’s a defined exit plan, with an established timeline. An example of this would be when contracts are exchanged, but the completion of either of the transactions is delayed. These types of short-term bridging loans are usually considered the best bridging loans in the eyes of lenders and borrowers, both. This is because it gives both sides a sense of certainty.
Open bridging loans, on the other hand, have no fixed timings and oftentimes the repayment source isn’t very clear.
Benefits of the Best Bridging Loans
Now that you’re up to speed with what short-term bridging loans are and their different types, we can tell you about their advantages! Here are the benefits that come with opting for the best bridging loans here at PFN Finance:
- Quick Process:
Straight from the get-go, bridging loans are a fast and effective way to get instant access to the money you need. They’re so simple and efficient; you can even pay them out within days. When compared to conventional loans, short-term bridging loans can save you a lot of time. Conventional loans take up many weeks of your life just to be underwritten. So, if you’re in a hurry, short-term bridging loans are your best option. - Lots of Potential:
By and large, most traditional resources are strict when it comes to loan applications. Lenders and banks will have very specific needs when it comes to “intended purposes”, so your application may take forever to be considered. This is where short-term bridging loans hold high potential! They can be used for any legal purpose, without needing to be questioned. All you have to do is prove that the loan can be paid back, no justification is needed, making this a quick and swift process. - Flexibility:
Bridging loans are a lot more flexible when it comes to paying back your loan. In most loan cases, the bank has the final say on when (and how) you have to pay back your loan. Short-term bridging loans are much more flexible when it comes to interest payments and loan duration. - Lender Criteria Are Relaxed:
Most bridging loans are taken out and secured by using a valuable asset. In most cases, the asset in question is a property of some kind. This renders the usual lending criteria obsolete. Your ability to provide collateral is all that matters, so your proof of income, financial position, and credit scores can be considered differently. - Low Interest / Fee Rates:
Another great benefit that comes with short term bridging loans is that they are much more affordable than mortgages and other loans as in most cases the interest due for the term of the loan is allowed for in the facility from the start, so no monthly payments, the loans are paid back within the agreed period and interest paid for the period taken.
Conclusion
Now that you know more about the advantages of short-term bridging loans, you’ll need to find the right person for you. Here at PFN Finance, we have many experts who are skilled to help you in any way you need.
So, if you’re looking for the best bridging loans, contact us. We’d love to help you out.
