Finding a property of our choice is time consuming. And if you get a chance to buy it definitely you can't afford to miss it, just because of you are waiting for the realization of money from the sale of your property. In such situation you will surely seek the way to come out of this crisis. One of the best alternatives, which provides financial assistance in such period is bridging loan.



Bridging loan is the short term loan, which provides an instant financial support. Being, an element of short term market fund, they are comparatively expensive i.e. they carry high rate of interest.

Bridging loan is the best option, when the person is buying a property and he is waiting, for an amount to be realized from his property sale. Not only the property, but it can be also used for buying car or can be used for any other sudden financial requirements.

Repayment period varies from person to person, depending upon the amount. But, the person is always recommended that he should try to make repayments as earlier, as it is possible. As taking longer time for repayment will lead to accumulation of large interest. Thus, it increases the cost of loan and makes the loan, more expensive.

They can be availed by any person whether, a good credit scorer or bad credit scorer. But, the good credit scorer takes advantage over poor credit scorer in regard to the lower rate of interest and even can borrow larger amounts.

While approving bridging loan, the lender takes into account certain factors. They are:

•Financial status

•Flow of income

•Value of property

The security in the bridging loan is the property which is sold or which is to be sold, but the amount is not yet realized. Which implies, here collateral is the property which is to be sold.

Thus, if we evaluate bridging loans, the conclusion can be explained by illustrating its advantages and disadvantages.

Advantages:

•It is the fastest way to procure instant finance. They normally take less than 24 hours to provide funds.

•Bad credit raters can also avail.

•Being a short term loan, they can be repaid faster than, they have been assumed.

Disadvantage:

•Till the lender realized his amount from the sale, he is obliged to bear heavy interest.

•Bridging loans are expensive.

•As their property is secured against the amount, if he misses the payment. This will put his asset on risk.

Despite of all this pros and cons of bridging loan, it is considered as the best alternative to finance immediate needs of a person.