A bridge loan can be just the solution you are looking for. It is exactly as it sounds, it “bridges” between the time you need the money and the time you will get the money from another funding source. Making use of a bridge loan can be the most expeditious means of getting money quickly to meet a wide range of needs. These loans can be used for a wide range of financing needs such as:
- Personal use
- Debt consolidation
- Business needs
- Capital investments
- Other short-term needs
A bridge loan is a term loan but it is typically a short-term loan because it is designed to carry you over until your other funding comes through. It can be a useful tool that provides an immediate solution to a financial need. Like other term loans typically the terms or what your responsibility is for taking the loan is spelled out in pretty clear terms in your loan documents. The terms will vary but usually cover the amount of interest that you will pay for the money, when payments are due and when the loan obligation has to be paid in full.
This type of loan can be referred to as a “gap loan”, “swing loans” or “gap financing” each of the aforementioned is a “bridge loan” but different financial institutions just use different names.
What You Need to Know
This type of loan can be hugely beneficial when you need it because they typically:
- There is an accelerated application process
- They do not have prepayment penalties
However, there are some other points that you should consider, keep in mind that these loans are meant for short-term financing solutions. Since they are short-term solutions, the interest rates can be higher than what you would find on longer term loans. Additionally, the origination fees are higher. Most people and businesses that use this type of financial solution do not mind paying the higher interest rates because they plan on paying it off when their long term loan comes through.
Is it for You?
Getting the expert advice about this type of loan can be found inside of the Credit Care. Which can really pay off. You can make an informed decision about a bridge loan and whether it is the ideal funding vehicle to meet your needs. Learning more about this loan option can help you to explore all the possibilities that are available to you!