How Does A Bridging Loan Work?

If you’re one of the many who have asked, ‘How does a bridge loan work?’ Funding is here to help you out.

In finance, a bridging loan – otherwise known as a caveat loan – is a short-term funding solution taken out by a person or company until they secure permanent financing or pay off existing debt. In other words, it provides instant access to funds so that the borrower can meet their current obligations as soon as possible. 

A bridge loan from Funding can help you secure the funds you need quickly. We provide short-term funding secured against properties to businesses and individuals, and our award-winning industry experts work hard to provide our clients with great deals customised to their unique financial situations.

Is a bridging loan a good idea for property investment?

There are several factors to consider when deciding whether or not to take out bridging finance for property investment. Some of these include interest rates, monthly fees, and the likelihood of your property generating income.

If you foresee that a property has a strong rental income and a possibility of appreciation, a bridging loan can help you seize the opportunity quickly until you secure long-term financing. The interest rate on your loan helps you calculate whether the increased cost of borrowing is worth it in terms of the potential return on investment. 

To get an idea of the interest rates associated with your loan, apply for a personalised Express Quote on our website instead of looking for a bridging loan calculator elsewhere. To begin, all you have to do is enter the following information:

• Basic personal information (name, email, and phone number)
• Loan details (purpose of the loan, loan principal, and loan repayment terms)
• Property information

After filling out the Express Quote, you’ll receive a same-day conditional approval outlining all the terms, rates, and fees for your unique loan scenario. Afterwards, just wait for the formal approval from our team, and you’ll be signing the loan documents in no time. Once you submit the signed documents, you’ll receive the settlement in three to five days.

What else can I use a bridging loan for aside from buying property?

To answer ‘How does a bridging loan work?’ you first have to understand that bridging loans are typically used by homeowners looking to purchase a new home or new property as soon as possible while they try to sell their current property. But apart from buying property, what else can a bridging loan be used for? 

Bridging loans can be used for a variety of purposes, especially when you need immediate funds while processing alternative or permanent financing. For example, you can use a bridging loan to renovate a property before putting it on the market at a profitable rate. You may also use bridging loans for short-term business loans, start-up funding, and debt consolidation, among other things.

At Funding, a bridging loan can be used for any short-term financial need that you may have. This type of loan can be beneficial in a variety of situations, so it is worth considering if you find yourself in need of interim financing.

How many times can I get a bridging loan?

There is no set limit on the number of times you can get a bridging loan. However, most lenders will only approve one loan at a time. If you need to take out multiple loans, you will need to apply for each one separately and have it approved by the lender.

Each time you take out a loan with Funding, you will need to provide real estate such as residential properties, commercial properties, or vacant land across Australia as loan security. The amount you can borrow will be affected by the value and location of your property. Our offered principals range from $20,000 to $10 million, with loan tenures of one to thirty-six months.

Borrowers may be individuals, companies, or trusts borrowing for needs such as renovation loans, home equity loans, commercial property, and the like. Additionally, borrowers must have sound real estate security, the ability to meet their repayments on time, and a strong repayment strategy to exit the loan at the end of the term.

Apply for a bridging loan today with Funding.

Since our operations began in 2015, we have rapidly grown to become one of the most trusted private lenders in Australia. Our goal is to provide you with short-term financial assistance, and we are more than happy to help.

One of the things we take great pride in at Funding is our excellent customer service. Our team is always ready to help you by providing you with information regarding all our loan products, including how to apply for them and what precisely they are for. 

You can speak with our support team to get a more personalised assessment of whether a bridge loan is right for you. Perhaps you have any questions about our second mortgage loan options or a more in-depth explanation of ‘How does a bridging loan work?’ Then feel free to contact us on our website, through email at info@funding.com.au, or by calling us at 1300 44 33 19.

Get an Express Quote from Funding today!