Bridging loan or swing loans are taken out to solve a temporary cash flow which have incurred at the time of buying a property or business, or paying for a major renovation. Bridging loans are of great help to the borrowers who wants to purchase a property prior to selling the current one. Bridging loan fills the gap between the two transactions which may be difficult otherwise.



Bridging loans are secured loans as lender is secured against the old property of the borrower i.e. old property acts as collateral for the loaned amount. Bridging loans provide the finance for different properties like residential property, commercial or semi- commercial property, auction property, retail shop etc.

Generally, bridging loan amount ranges from £1, 00,000-£4, 00,000. So it is mandatory for the borrower to evaluate his home before applying for the bridging loan as it can fetch larger amount.

Bridging loans can be distinguish as open or closed. If borrower is buying a property and contract for sale of existing property is not completed then borrower can avail open bridging loan. Whereas if the borrower has been through with the contract and delay between the receipt of funds and the settlement to purchase the new property then closed bridging loan will be opted by the borrower.

Bridging loans are short term loans as it repayment period varies from some weeks to months and maximum to a year. Therefore, bridging loans offer higher interest rate. Borrower has to pay only the interest till his property is sold but when his property is sold borrower repays the entire loaned amount i.e. principal amount to lender.

Bridging loan helps the borrower to get the dream house by filling up the temporary cash flow.