As the name itself suggests, a bridging loan acts in bridging the cash gap that is faced by the borrower if he wants to buy a new property. The cost of the new property is paid through the bridging loan and whenever the earlier property of the borrower is sold off, he can repay the amount to the lender, during the term of repayment of bridging loan.



A bridging loan is a short term secured loan which is borrowed by the buyer of property for tenure of 1-12 months. The collateral which is required to make the loan secured is the property that is being bought by the borrower. Once the repayment has been made, the title of the property is transferred back to the name of the buyer of the property.

Depending upon the status of sale of his earlier property, the borrower can take up an open end or a closed end bridging loan. With the sale deal of the earlier property underway, the borrower can take up the closed end bridging loan. The sale is being made and the only delay of the deal is in the receipt of the cash amount. Therefore the borrower can repay the loan as soon as he gets the money.

If however, the borrower can take up open end bridging loan if he has still not made the deal of his earlier property. The borrower has a time of 12 months to make the sale and repay the bridging loan. During this term though, the borrower has to pay the interest every month.

Bridging loan helps in coping up with the cash gap that occurs sometimes in between property deals. The deal is burden-less and beneficial.