Bridging Loan - Advantages And Disadvantages
Bridging loan is important in our cash flow
Bridging loan is important in our cash flow. It can be used as a short term loan for people who are urgently in need of cash. It help to reduce the gap between cash receive and cash payments. However, there are a lot of advantages and disadvantages you need to consider before taking a bridging loan. The loan ranges from few hundred to few millions.The advantages include
1.Loan approval is fast.
2.Short term loan
1.Loan approval is fast
Bank will make decision in a short period of time for this kind of loan. Banks understand that people who need the loan very quickly to finance their project can apply for it. The process is also simple. The loan is normally applied for buying a property and renovation of property. The minimum time for loan approval is 24 hours only.
2.Short term loan
This kind of loan is very useful for decision that guarantee of money back in short period of time. It can be sales of property or other income of money. It can help to ease short term shortage of money. The period of repayment is about one to twelve months only. The repayment is scheduled that can suit you best. For example, you need cash urgently and are able to get the cash back in few months are advisable to take up this loan.
The disadvantage includes
1.High interest rate
This kind of loan is very expensive. This is because two types of payments are being charged. The payment includes arrangement fee and interest rate. This is one of the most expensive loans available in banks. If you are unable to pay back your loan, this will cause a high penalty fine towards your loan. There are many repayment plans for you to choose. The rate is different from one bank to another bank due to the competition of banks. You need to choose the lowest interest rate that can be offered by banks.
by: Balajee Kannan